CLIENTS of the former Speirs & Jeffrey are facing an increase in fees following the takeover of the Glasgow-based stockbroker by Rathbones.

The 2018 acquisition of Speirs & Jeffrey by Rathbones for an initial £104m ended 112 years of independence for the firm.

READ MORE: Stockbroker brothers share nearly £35m as venerable Speirs & Jeffrey sold to Rathbones

The deal allowed Rathbones, which has headquarters in London, to increase its funds under management by around £7 billion and expand its client base in Scotland.

Rathbones regional director Adam Drummond has written to former clients of Speirs & Jeffrey advising them that they are facing their first increase in fee rates since 2017.

The changes take effect from October 1 and could result in a significant increase in the charges payable by some clients for discretionary management services.Someone with a £1.5 million portfolio will see their charges increase to £13,125 a year from £6,000, net of transaction costs.

In the letter Mr Drummond told clients the cost of providing a modern investment management service had continued to increase relentlessly since fees were last increased.

He noted: “Regardless of our change of ownership during the intervening period the present charging structure is in our judgement unsustainable.”

Mr Drummond cited the evolving regulatory environment; the need for ever-increasing IT investment; the need for a deeper and stronger research capability and important enhancements to the control environment to protect against fraud and cyber-crime.

READ MORE: Rathbones sheds 58 jobs in Glasgow

Mr Drummond said the revised fee structure was simpler and more transparent, noting: “We will be eliminating dealing commission and simply charging a straightforward management fee based on the value of the portfolio.”

Clients will pay one per cent annually in respect of the first £750,000 in value of their portfolios; 0.75% in respect of the next £750,000 and 0.5% on the value over £1.5m.

They currently pay 0.5% in respect of the first £750,000, 0.3% for the next £4.25m and 0.2% thereafter. Clients are charged £25 in respect of each transaction completed.

The minimum annual charge will increase to £2,000, from £1,500.

A spokesperson for Rathbones said the company had previously announced that it would be increasing the fees for former Speirs & Jeffrey clients. The changes it is making will bring the fees they pay into line with the rest of the market.

When the deal with Rathbones was announced Speirs & Jeffrey said it had become too large to be a boutique company but too small to progress the way it wanted to.