Towry to offload 6,000 clients

Towry is closing the accounts of its 6,000 smallest customers, saying the service it is offering them is not cost effective.

The group is closing its doors to clients with less than £5,000 in assets on December 10, in a move which will affect former clients of Edward Jones, which it bought in October 2009, and existing Towry clients. It is targeting clients with at least £100,000.

Peter Foster, the head of marketing, says: “A key part of TCF is to make sure you are promoting yourself to appropriate clients. If you look at the total of the money in these 6,000 accounts it is not a lot of cash.”

He adds many of the clients the firm has inherited from Edward Jones have their portfolios invested in stocks which are not appropriate for their level of risk tolerance. (article continues below)

In a letter to affected clients last week, seen by Money Marketing, Fund Strategy’s sister-publication, Andy Cowan, Towry head of wealth advice, said they have the choice of liquidating their investments or being transferred to another company.

He says: “The process of transferring securities to another company… can be very lengthy and you should be aware that it can take several months. There are also costs associated with this approach.”

The letter states clients will be charged £20 plus VAT per security per account to transfer into another company’s name. They will also be charged £57.50 to terminate or transfer an Isa account to another company.

Clients who do not respond within 45 days will have their investments liquidated automatically and cheques with the proceeds will be sent to their addresses.

Note: This article was updated at 4.02pm.