Charging and costings
When it comes to charging Mearns & Company has worked out a matrix, which will determine the initial advice fee. This fee is mainly based on time spent to do the work and inclusive of all initial costs, barring any specialist investments.
"We don't base the initial fee on a percentage of the assets being reviewed. Instead we've got a matrix that calculates our time, how long it will take us to do a certain exercise," McInally explains.
"We understand that for smaller portfolios that value can sometimes be quite high relative to a percentage basis but conversely for a high net worth client or a larger portfolio that fee can be really competitive, if we're comparing that to our peers."
The way Mearns & Company approaches the costings is to start with the lowest level possible of administration, paraplanning or advice.
What can't be done by administration gets moved up to paraplanning and so on. This ensures the fee will be the lowest it can be for the client. If the work ends up exceeding that cost, the firm absorbs the difference.
"We say to the client the initial fee will be this and that's the fee they will pay. There's not going to be any nasty surprises or any invoices at the end for a higher fee," says McInally.
To administer this service the firm maintains a large back office, which is still somewhat uncommon in the industry, he says.
"And that was always Margaret's idea. Her idea was you should give a good level of service by having a large back office to back up the advisers.
"So I think based on taking that into consideration, we are operating that service and it's just being really efficient in the way we work."
The pinnacle of good client service, however, is a good ongoing service. After all, says McInally, "it was the reason Margaret set up the company back in 1994."
He says peers often say Mearns & Company "does a lot and perhaps too much in terms of the ongoing service.
"We are very, very passionate about the ongoing service. It's something that we take very seriously."
The firm's clients are offered at least one portfolio or financial plan review each year. The latter meeting is preceded by an information update form, which collects information about the client's savings account, bank account balances, any specific discussion points they'd like to raise at the meeting, "so we can get time to research any of that in advance to have a more productive meeting".
The review itself consists of a discussion of the financial plan and assets, the investments and their performance, and the cashflow and future projections.
