Brooks Macdonald has joined a growing list of DFMs to scrap VAT across its 10-strong managed portfolio service.
Since 1 January the £13.7bn wealth manager has stopped applying VAT on its custody MPS and those held on third party platforms.
A spokesperson from Brooks said the move would allow the DFM to offer IFA partners and their clients “high-quality investment management services at an even more competitive price” regardless of the platform they use.
“Following guidance from HRMC, we are delighted to be able to remove VAT from our MPS and are working with our platform partners to remove it at the earliest opportunity.”
Brooks is the latest in a line of wealth managers to slash its charges as the MPS price war continues to heat up.
Tilney Smith & Williamson and Brewin Dolphin are among the competitors that axed VAT on their model portfolios last year.
Investec Wealth & Investment also dropped VAT charges for its MPS range in November after slicing annual management charges from 0.3% to 0.2%. With a capped OCF at 0.6% it proclaimed to be one of the cheapest options on the market.
See also: Advisers urged to look beyond headline cost as MPS price war intensifies
Advisers invested in Brooks’ seven model portfolios were previously charged an AMC of 0.75% plus VAT with ongoing charges ranging from 0.56% for its Low Risk Defensive Income Portfolio to 0.91% for its High Risk Growth Portfolio.
Its trio of passive portfolios had an AMC of 0.50% plus VAT and OCF ranging from 0.15%-0.16%, according to the latest factsheets.
Brooks revealed assets under management had hit £13.7bn for the year ended 30 June 2020 despite being hit by £800m worth of redemptions.
In October Chief executive Caroline Connellan (pictured) announced the DFM had formed a strategic partnership with software provider SS&C Technologies to pursue its next stage of growth, after years of cost-cutting and restructuring.
