Component costs Efficient costs should really be closer to the following. Stock selection; between 0.5% and 0.75% for active investment in the broader market and between 0.75% and 1.25% for the management of specialist and overseas sectors. Asset allocation; between 0.1% for passive global indexing and 0.25% for global active allocation. Planning and personalisation; between 0.25% and 0.5% of assets depending on level of personalisation and planning.
Clients who are receiving passive and indexed asset management should receive the index component costs; ETF (0.25%), asset allocation (0.1%), investment planning (0.5%) to a total of 0.85%. Clients whose risk preferences can accept active strategies would have a higher cost base, 1.25% (active management), asset allocation (0.25%), investment planning (0.5%), or a total of 2%. The above represents basic costs before sales and services taxes and represent the type of cost structure an organisation with an efficient business process and integrated software systems should be capable of producing. Many organisations fail to get anywhere near these levels.  | 
