Select fees: what the single, tiered consultancy fee delivers for trustees

Insights

Why a single, tiered consultancy fee on a family-group basis, with no double charging or commissions, is cheaper than a typical investment management arrangement

5 mins

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The Select Model Select Connect

Author

Tom Wiseman

CEO

Tom is the Chief Executive Officer of Enhance Group overseeing our multi-jurisdictional Monitor and Select solutions from our Jersey headquarters.

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Wealth management costs are notoriously hard to compare. Headline management fees conceal layered platform charges, transaction costs, FX spreads and embedded fund fees. Select is different by design: a single, tiered consultancy fee applied on a family-group basis, plus the platform fee and the underlying fund management fees, each itemised in a detailed fee estimate before engagement. This article walks through what the fee covers, why the model is cheaper than segregated mandates, and what trustees should ask any investment consultant about total cost of ownership.

Why investment fees matter, and why they are hard to see

Investment manager fees are the single biggest cost most trustees control. A 25-basis-point difference compounded over a multi-decade trust horizon translates into materially different beneficiary outcomes, yet fees typically receive the least systematic scrutiny of any area of trustee investment governance. The reason is simple: most trustees cannot see the full fee picture clearly enough to scrutinise it. Below the headline percentage sit layered costs, transaction costs, FX spreads, custody and platform charges, securities-lending revenue, performance fees, and retrocession payments between platforms and managers. By the time it is all added up, the all-in cost of a complex wealth management arrangement is materially higher than the headline percentage suggests.

The single Select consultancy fee is a tiered percentage of the assets Enhance consults on, applied at family-group level so all entities and family members benefit from combined economies of scale. The minimum investment threshold is £1m on a family-group basis, with pragmatic exceptions where the broader trustee relationship justifies it. Above this, the larger the family group, the lower the percentage paid. Alongside the consultancy fee sits a flat percentage platform fee charged by the private banking partner for custody and execution, plus modest administrative charges for specific trade types. Underlying fund management charges are implicit within the fund structure. A detailed fee estimate is provided before engagement that itemises every cost, so the trustee sees the total picture before signing.

The single fee covers everything Enhance does for the client. That includes a dedicated Investment Consultant, supported by a Research Analyst and Associate. It includes the IC-approved fund universe, with ongoing 5P research. It includes portfolio construction and platform implementation, quarterly Monitor reviews testing the portfolio against the trustee’s investment policy, Connect access for the trustee and associated family members, regular review meetings, and Governance Manager support throughout. There is no separate Monitor fee, no separate Connect fee, no separate research fee, and no hourly billing. What the fee deliberately excludes is anything that creates a conflict of interest: Enhance receives no fees from underlying fund managers, no commissions, no retrocessions and no platform inducements. The single consultancy fee is the only revenue Enhance receives from the engagement.

Three reasons the all-in cost of Select is typically lower than an equivalent wealth management arrangement. Funds, not segregated mandates: fund managers running a single unitised portfolio concentrate their attention on that product, and funds are typically more tax-efficient and cheaper to switch between than segregated equivalents. One platform, not many: consolidating custody, reporting and administration onto a single platform integrated with Connect collapses operational complexity and reduces platform charges as aggregate assets cross tiering breakpoints. IC-negotiated pricing: where Select clients’ aggregate assets give Enhance leverage with a fund manager, the Investment Committee negotiates competitive rates on clients’ behalf, a scale benefit individual trustees rarely have access to alone.

The family-group fee model

Many trustee relationships span multiple entities, trusts, foundations, companies, individual family members, each potentially holding assets at a different scale. Charging each entity at its own fee tier would penalise the family for the way its wealth is organised. Select does the opposite: clients are grouped on a family basis when the consultancy fee tier is applied, and every entity within the group pays at the tier the combined assets determine. Families with multiple structures benefit from their combined economies of scale rather than being fragmented into smaller, individually priced engagements. The £1m minimum is applied on the same family-group basis.

What the fee estimate looks like in practice

Before any engagement begins, the trustee receives a detailed fee estimate built around an indicative portfolio matched to the trustee’s stated objectives and risk profile. The estimate itemises three things: the consultancy fee at the applicable family-group tier, the platform fee charged by the private banking partner, and the expected underlying fund management charges based on the indicative fund selection. Each is expressed both as a percentage and as a cash amount at the proposed investment level. The trustee’s board can review the estimate line by line before any commitment is made. It can also ask the Investment Consultant to model alternative scenarios: a different asset allocation, or a different family-group composition, before deciding whether to proceed. Nothing in the fee estimate is provisional pending disclosure later; the itemisation happens before engagement, not after.

What trustees should ask any investment adviser

Even where Select is not the right answer for every trustee, the questions it is designed to answer should be asked of any investment adviser. What is the all-in cost of the arrangement, with every component itemised? What revenue does the adviser receive from sources other than the client’s fees? How is the fee tiered, and at what asset level does it step down? Is tiering applied at family-group level or per entity? Are review reports and platform reporting included, or charged separately? An adviser whose answer to the first question takes more than a paragraph is, by definition, one whose fee model is not transparent.

The bottom line

Select is built to be cheaper to operate than a typical investment management arrangement in most trust structures. That is not because Enhance charges less for what it does. It is because the model itself is more efficient. Fund-based investing on a single platform, with IC-negotiated pricing and a single tiered fee on a family-group basis, produces a lower all-in cost of ownership than the equivalent multi-manager arrangement at the same scale. And the single fee covers everything Enhance does, including Monitor reviews and Connect access.

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