Financial News

deVere Group CEO Reveals Fees Clients Pay

Financial firms are often criticised for the fees they charge clients – but one CEO of a leading expat IFA has broken ranks to reveal how his firm makes money.

Nigel Green, founder and head of deVere Group, a leading international IFA with more than 80,000 clients in 100 countries and $10 billion under management, explained his company is paid fees or commissions depending on the rules laid down by financial regulators in different countries.

Fees are payments by clients to the company for ongoing investment and financial advice.

Commission – often called fees in some countries – are payments from financial institutions when deVere Group introduces a client to one of their products.

“All financial companies are scrutinised and so they should be whether it’s a bank, insurance company, a fund manager or an investment broker like us,” said Green. “People want to look at charging structures and what they consider to be the best value for money.

Customers happy with our service

“Our clients aren’t concerned about charges. They are happy with our service. We know that from the feedback we get. However, competitors sometimes talk about charges and sometimes imply that they charge lower than us. We are extremely competitive and in the end it’s about value and making sure you provide a great service to clients.”

During the interview at the London Stock exchange with journalist Holly Thomas, Green disclosed that clients in countries such as the UK, USA and Australia pay a 1% fee a year for financial advice.

But in some countries, clients pay no fees because financial institutions pay advisers commission for recommending their products to them.

Green argued his firm’s payment structure to advisers ensured they always offered best advice regardless of the amount of commission paid by a financial institution.

“We make sure our guys are rewarded but we don’t change the amount they are rewarded depending on commission paid by the institution,” he said.

Fees v commission

“They get paid the same for recommending so that they can give generally good advice whatever institution they have recommended the client to. This way, the client gets best advice.

“The institution will have offer commission depending on the product, so for a typical insurance product they pay us a fee of 1% or 1.25% a year as an introductory fee for that business.”

Thomas also asked which of fees or commission was most profitable for deVere Group.

“Fees tend to be ongoing, so it may surprise people that fees in the longer term can be more profitable,” said Green. “Lots of our business comes from fees in the UK, USA and Australia and we are very successful in those countries.”

Clients expect to pay fees for good service

Green also explained that deVere Group may also charge a one-off set-up fee to some clients if their financial planning is more complicated than normal.

“The set-up fee depends on the complexity of the service offered and sometimes this can be quite sophisticated. The charge is explained up front and they know exactly what that charge is going to be in advance,” he said.

He also believes clients expect to pay fees, as long as they are fair and fully disclosed.

“No one expects something for nothing. If you see a lawyer, you don’t want to be overcharged but you want an efficient service and you want to know your lawyer is charging you for a good professional service and that he is going to do a great job for you,” said Green.

“If that’s the case, you don’t mind paying fees and I think that’s the same with financial advisers. You don’t mind paying the fees if they do a great job and you feel that you get value for money and you know they have been clear and transparent and fully disclosed what you will pay upfront.”

50% rise in UK fees forecast for 2016

In response to that performance, deVere Group has announced new services in Britain for expats.

deVere Group UK expects fee income in Britain to rise by 50% in the next 12 months as expats return to the country from overseas.

The company is setting up a high net worth division for clients with a net worth of £1 million to invest to run alongside IFA deVere UK and deVere Mortgages.

deVere UK specialises in offering retirement advice, offshore pensions, investments and estate planning.

Seven out of 10 mortgage inquiries come from overseas and most originate from Switzerland, the United Arab Emirates, Qatar or the Asia Pacific.

The firm has also seen a surge in information about pensions since flexible access rules were introduced in April 2015.

Watch the full interview with Nigel Green of deVere Group here:

1 thought on “deVere Group CEO Reveals Fees Clients Pay”

  1. He has completely avoided how they actually get paid and this is the same process they train their advisors. The 1% advisor fee is an ongoing charge, Nigel what about the initial commission you earn???? UK is different but in the US they use the same model as everywhere else.

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