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Monday, 7 December 2015

Wealth Management: 8 costs you may not know about!

You already know there are commission or advisory costs if you take financial advice, but you also should know that there may be some hidden costs you might not be aware of.


Charges levied on cash balances: The first relates to charges levied on cash balances. These can take place before a portfolio is fully invested, which can come as a complete surprise.

Transaction fees: Transaction fees can be included in annual management fees, but you should be aware and find out if this is the case. It can drag on performance and can be difficult to predict since it depends on the style of the wealth manager, client objective and market conditions.

Underlying costs: The underlying costs for using third party funds vary between managers and different strategies, therefore it is important for you to understand.


Custody and nominee costs: Some wealth managers and private banks charge for the safe custody of assets. They may also charge for the collection of interest and dividends, which may be as high as 0.45 percent.

Platform charges: Platform charges, such as those for overseas investments held in a custody account, are something clients should watch out for.

External brokerage: External brokerage charges are normally passed on to clients. They are accrued dealing in overseas assets.

Foreign exchange costs: Commission charges apply to overseas assets bought and sold in foreign currencies.

Exit charges: Exit charges can be very high and will leave investors stuck with a firm they no longer want to be with.


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Just Service Hong Kong is a member of the Hong Kong Confederation of Insurance Brokers in Hong Kong, transacting Long Term (including linked long term) Insurance business. Nothing in the comments above should be taken as offering investment advice or making an offer of any kind with regard to financial products or services of any kind. It is therefore important to reinforce that all comments above are designed to be general in nature and should not be relied upon for considering investment decisions without talking to licensed advisers.

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