Growing regulatory costs are causing some UK wealth managers to fire clients with less than £500,000 of investable assets. One entrepreneur recently complained "They wanted me to commit to giving them £1m to look after. Their fees starts at 1% so that’s like handing them a cheque for £10,000 on the spot,!. It was basically ‘Hi, here’s a posh coffee and a PowerPoint presentation, now give us a million quid’.”
The higher minimum investments have left growing numbers of clients disgruntled: overall satisfaction ratings fell from 62 per cent a year ago to 54 per cent in the latest survey. The trend results from growing regulatory costs and changes to rules on how wealth managers charge clients, according to Paul McGinnis, analyst at Shore Capital investment group. These have made it more difficult for the industry profitably to advise people with assets up to £100,000.