King Street Wealth Management has challenged the pensions industry to leave behind initial adviser fees in order to “foster long-term thinking” with clients.

The Manchester-based wealth management company has called upon the industry to “challenge the perception that initial fees are an industry standard”, explaining that they can contribute towards a culture of “complacency and inefficiency” amongst wealth management firms.

King Street Wealth Management chief investment officer, Matthew Singleton, stated: “Initial fees are unnecessary and are precisely the sort of arbitrary, opaque charge that gives our entire industry a bad name.”

Singleton also described the use of exit fees as a “black mark” against the industry, arguing that a client shouldn’t be penalised “because they’re not satisfied with the service or value they’re getting”.

The firm have also raised concerns around how the initial fees are calculated, with Singleton adding: “The fact that fees are often a percentage of the entire pension pot is really unfair too.

“The value of the pension is irrelevant to the amount of effort required to do the research. The industry average for these fees seems to be around 3 per cent. So a person with a pension pot of £200,000 stands to pay out £6,000 just for the privilege of looking to move their pension."

Singleton concluded: “We’re encouraging all of our industry peers to take a longer term view and value ongoing relationships, instead of cashing in up-front. If you believe that you’re going to look after a client, they could be a client for 30-plus years, so why charge an initial fee?”

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