Latest news with #fees
Forbes
6 hours ago
- Business
- Forbes
Why JPMorgan Is Hitting Fintechs With Stunning New Fees For Data Access
Under CEO Jamie Dimon, the bank's aggressive new fees are a big escalation in the ongoing battle between financial services incumbents and challenger fintechs. Getty Images J PMorgan Chase, the biggest bank in America, has been angry for years about being forced to hand over customer data to fintech companies for free. Now its billionaire CEO Jamie Dimon seems to be capitalizing on a moment of deregulation to slap fintechs with new fees, and the coming negotiations will determine how much damage the behemoth inflicts on their businesses. The bank's aggressive move is a big escalation in the ongoing battle between financial services incumbents and challenger fintechs. Since the start of the fintech industry, upstarts have needed access to consumers' bank data to perform basic functions like transferring money and making budgeting recommendations. Data aggregators like Plaid and MX emerged over a decade ago to fill that need. They make software that bridges bank-to-fintech connections and charge the fintechs for the service. Big banks, including JPMorgan Chase, have long given aggregators access to consumer data for free, complying with a Consumer Financial Protection Bureau (CFPB) rule that prohibited banks from charging for it. But in May, amid the Trump administration's crusade to vastly reduce regulation, the CFPB said it plans to repeal the rule. Now JPMorgan Chase is essentially telling aggregators: You've built a nice business off of our data–now give us our cut. The scary thing for fintechs is the size of the fees. Chase first sent pricing sheets to aggregators earlier this month. While details remain hazy, the prices are steepest for payments-related data transfers and would require leading aggregator Plaid to pay an estimated $300 million a year in new fees, according to a person briefed on the pricing sheet. That's more than 75% of Plaid's 2024 revenue. Bloomberg first reported the news of the coming fees. Have a story tip? Contact Jeff Kauflin at jkauflin@ or on Signal at jeff.273. Plaid's head of corporate affairs Freya Petersen and JPMorgan Chase spokesperson Drew Pusateri declined to comment on the size of the fees. Two fintech executives we spoke with for this article believe it's fair for JPMorgan Chase to charge something for data access. The data feed has cost the bank 'a lot of money' to set up and maintain securely, Jamie Dimon said last week. But the bank's real costs to create and operate the data connections remain a mystery, as does its method for coming up with the fees' eye-watering prices. If the fees don't come down, they could make popular features uneconomical for fintechs to offer and leave consumers worse off, fintech executives believe. Miranda Margowsky, a spokesperson for the fintech trade organization the Financial Technology Association, says Chase designed the fees 'to crush competition, levy a tax on fintech innovation, and cement their power in the marketplace.' JPMorgan Chase spokesperson Pusateri told us in a statement that the fees are a way to reign in the excessive number of times fintechs are pulling JPMorgan Chase's customers' data. 'We receive nearly two billion monthly requests for customer data from middlemen, and more than 90 percent of those are unrelated to a consumer using fintech services.' He added that the new fees 'will ensure that data is provided only when customers request it.' He also said Chase 'explicitly reserves the right to charge for data access in its current agreements with data aggregators.' Petersen said Plaid has invested heavily to build its data connections, and it provides data 'only at the behest of consumers.' She added that the data belongs to consumers, not banks. Sima Gandhi, a former fintech entrepreneur and early Plaid employee who's currently a senior advisor at regulatory consulting firm FS Vector, believes that Chase should instead develop a new data strategy that benefits consumers and passes fees on to them. For instance, Chase could create a premium feature and charge people, say, $1 a month for unlimited data sharing, in the same way that Apple charges for data storage. Chase has no plans to do that, Pusateri says. What will other big banks do if Chase's new charges take effect? They'll likely copy Dimon and tack on fees too, rather than sit back and watch their biggest competitor exert more control and create a new revenue line. PNC Bank CEO Bill Demchak has already said he's considering levying data-access fees as well. Now aggregators are praying that they can negotiate the fees down. It's possible that Chase is taking a President Trump-style approach to negotiating, starting high but being willing to go much lower. Allison Beer, the bank's CEO of Card Services and Connected Commerce, is leading the charge on the negotiations, according to a person familiar with the matter.
Daily Mail
10 hours ago
- Business
- Daily Mail
I'm a wealth planning expert: Here's why you must always ask your financial adviser for the 'all-in fee'
Charlotte Ransom is the co-founder and chief executive of wealth manager Netwealth. Did you know that you have the right to ask exactly what 'all-in fee' is being charged by your financial adviser, planner or wealth manager. If you are a longstanding client, you might well be unaware of the total amount you are now paying, and will never find out unless you ask because advisers do not typically issue an annual invoice. Instead, fees are taken directly out of your investments, Isas or pension fund, so you might not notice the big inroads they are making into your overall returns over time. The fees advisers levy in this way include not just their own, but those for any third party services they use on behalf of your account, such as platform or custodian charges. Your right to be told about every individual item or service you are paying for, plus the most important 'all-in fee', is a rule set by the Financial Conduct Authority. But too few clients who come to my door are aware that advisers MUST provide this information - not only when you first sign up for their services, but on your request at any point in your business relationship with them. Getting a full fee breakdown, plus the 'all-in fee', from your adviser is important for the following reasons. First, once you know the total fee, you will be armed with key information when you look around for the best deal to fit your needs and circumstances. Second, the size of the fees has a significant and compounding impact on your investment returns – this can get lost when investment markets are strong, but they make a huge difference to the money that ends up in your pocket. Let's look at what you should ask your adviser in terms of fees, and then how to make the best use of the details you receive from them. What to ask a financial adviser, planner or wealth manager about fees Ask for a full breakdown of fees and the total 'all-in'. If you are not given a satisfactory answer or don't understand the answer, do not be put off! Ask again! If an adviser fobs you off or the fees they provide aren't clear, that's a red flag and may breach FCA rules. (It should go without saying that you should only use an adviser registered with the FCA - check here.) If you detect any uncertainty or reluctance on the part of an adviser to be completely transparent on any fees, steer clear. If you don't understand any of the terms used, don't hesitate to ask for an explanation. But here is what you can expect in a full breakdown that the all-in fee will consist of. The fee list you are given will broadly cover the following areas. - Upfront fee for initial planning - Ongoing investment management and advice fees - Platform and fund fees - Other third party fees and tax Regarding ongoing fees, you should receive regular updates on charges, and advisers must prove they're delivering value for the service you are receiving, for example during annual reviews. Here's a more detailed list, explaining some of the jargon you will come across. 1. Annual management charge (AMC) - A percentage fee for managing your investments, often between 0.5 and 1.0 per cent per year. 2. Platform or custody fee - Charged for holding and administering your investments. This can be a flat fee or a percentage of your assets. 3. Fund fees (ongoing charges) - Additional costs from the funds used in your portfolio. These fees are on top of the AMC and taken at source by the funds themselves. On passive funds, those that track market indices, you can expect these to come in between 0.1 and 0.4 per cent. For active funds, run by a professional manager, they will usually be between 0.6 and 0.9 per cent. 4. Trading or execution costs - Charged when buying or selling investments. These are often not shown since they are estimates, but should be understood since they may add another 0.10 to 0.25 per cent in costs to your portfolio per year. 5. Financial planning fees - These will be charged on top of the AMC for financial planning related to topics such as Isa or pension contributions, retirement planning, tax optimisation, gifting and so on. Advice and financial planning fees are often 0.5 per cent to 0.75 per cent per year. 6. Upfront/initial fee - Most advice firms charge an upfront fee for an initial report on your assets and overall circumstances. They may also charge an upfront fee every time you add to your account, for example for an annual Isa contribution. This fee is often between 1 and 3 per cent and is charged in addition to the ongoing financial planning fees. 7. Exit penalties - These are now rare but it is worth checking to be sure. 8. Tax reporting fees - Annual tax packs (for capital gains tax and income tax) may be included but it is worth checking. 9. VAT - Not all quoted fees include VAT, so check if it applies or whether it's added on top. 10. All-in fee - The FCA reviewed financial adviser charges in 2020 and found clients were typically paying 2.4 per cent upfront and 1.9 per cent in total ongoing charges per year. If you combine the two figures that works out as 2.14 per cent a year over 10 years. What to do when you know your all-in fee Investment performance matters of course but fees are the key aspect that you can control when it comes to having your money managed. It is the 'net-of-fee' return which will most impact your financial future. If you shop around, you should be able to beat the typical 2.14 per cent a year over 10 years quoted above and cut it by 1 percentage point. An annual fee saving of 1 percentage point on a £250,000 investment portfolio or pension fund is worth £2,500 every year, and over 10 years is a saving of £34,000 based on 5 per cent growth. Here is what that saving in annual fees represents based on annual returns of 3, 5 and 7 per cent on investment or pension pots worth £100,000, £250,000 and £500,000. Shop around for the best adviser, planner or wealth manager In order to find an adviser, for the first time or if you decide you want to move on from your current firm, be clear on what you need. There are a wide range of service providers from smaller independent advisers to large wealth managers, as well as hybrid propositions which provide both investment management and financial planning advice enhanced by modern technology. Investment managers will run discretionary portfolios on behalf of clients – their job is to invest in globally diversified equities and bonds to provide a range of investment returns to meet clients' goals. Financial planning services will tend to cover the same important areas such as planning for retirement and optimising tax efficiency. The key difference is most likely to be in charging structures, and once you know a firm's full set of costs and charges it will be easier to compare to other providers. Remember that it is never too late to change adviser or wealth manager, regardless of what fees have already been paid. Investment and retirement horizons last a very long time and now – equipped with more information – it's important to ensure that your money is working as hard as possible for you, not for someone else.
The Sun
3 days ago
- Business
- The Sun
Santander customers FUME over ‘disgusting' £120 fee for key bank account after being promised it would be ‘free forever'
SANTANDER customers are outraged after the bank revealed it will start charging £120 a year for an account it promised would be "free forever". Thousands of small business and self-employed account holders are facing £9.99 monthly charges from October. 1 This comes despite written assurances that their accounts would always remain free of fees. Santander's move has left customers feeling betrayed. Customers have taken to social media to vent their anger. One user said on "Promised me free business banking forever in writing, and now they want to charge £9.99 a month. Is this even legal?" Another branded the move "absolutely disgusting". The changes will impact three types of business accounts: 1|2|3 Business Current Accounts, Business Everyday Current Accounts, and Business Current Accounts. Santander said that the "free forever" promise only applied to accounts offered by Abbey and Alliance & Leicester before their 2008 merger. The bank first attempted to introduce fees for these accounts in 2012 but backed down after customers threatened legal action. However, these accounts were shifted to the Business Everyday account in 2015, which did not include the "free forever" promise. From October 1, these accounts will be closed, and customers will be automatically switched to Santander's new Business Current Account – Classic. Switch bank accounts for free perks This migration comes with new fees and charges that could significantly impact businesses, especially those handling large cash deposits or relying on cheque transactions. Under the new structure, every Business Current Account – Classic will incur a £9.99 monthly fee, regardless of the type of account customers previously held. While some accounts were free, others offered additional benefits with charges as high as £40 per month. Several other companies, such as Virgin Money, Monzo, and Co-operative Bank, offer free business banking. A spokesperson for Santander said: "The business banking landscape has changed significantly over the last decade. "As such, we are simplifying our business banking offering as the first step to ensure that we can sustainably and efficiently evolve to better meet the needs of our business customers in the future." Santander Business Current Account – Classic charges SANTANDER has also revised other charges that could hit businesses hard. For example: Cash deposits: Free up to £1,000 per month via Santander cash machines, but £1.25 per £100 for anything over that. Deposits made at Santander branches or Post Office counters will also cost £1.25 per £100. Cash withdrawals: Free at Santander cash machines, but £1.25 per £100 withdrawn at branch counters or Post Office counters. Cheque deposits: £0.70 per cheque. Overdraft fees are also set to change, adding further financial strain for some customers. What else is happening at Santander? The bank is closing its 123 Lite current account, which offers up to 3% cashback on household bills for a £2 monthly fee, on August 21. Customers affected by the closure will be automatically switched to Santander's Everyday Current Account. This account has no monthly fee but does not include cashback benefits. The 123 Lite account has not been available to new customers since 2022, however, hundreds of thousands still rely on the current account. The 123 Lite account allowed bill payers to earn up to 3% cashback, capped at £15 per month, on expenses like council tax, mobile phone bills, energy, and water. However, if you still have a 123 Lite account, cashback will stop automatically, and you will no longer need to pay the £2 monthly fee from August 21. If you're looking to keep cashback perks, the Everyday Current Account you'll be switched to won't be suitable, as it doesn't offer any cashback features. Instead, customers who want to stay with Santander may want to explore the Edge or Edge Up accounts. The Santander Edge account offers 1% cashback on certain household bills and debit card spending at supermarkets, petrol stations, and on travel. This account has a £3 monthly fee, with cashback capped at £10 per month. For a higher cashback limit, the Santander Edge Up account costs £5 per month and allows you to earn up to £15 per month on both bills and debit card spending. To keep these accounts active, Edge customers must deposit at least £500 per month, while Edge Up customers need to deposit £1,000. However, from September 9, cashback on supermarket, fuel, and travel spending will be removed for both accounts. Customers will only continue to earn 1% cashback on household bills like council tax and utilities. If you're looking to maximise your cashback, there are other options available. For example, American Express ' Cashback Everyday Credit Card offers an impressive 5% cashback on purchases for the first five months (up to £125). What is cashback? CASHBACK is a type of reward offered by banks, credit card providers, and retailers where customers receive a percentage of their spending back as cash. Essentially, it's a way to earn money while making purchases. For example, if your card offers 1% cashback and you spend £100, you'll earn £1 back. Cashback can be credited to your account, deducted from your balance, or saved up for future use, depending on the provider's terms. It's often offered on everyday purchases, such as groceries, fuel, or online shopping, and may be part of a promotional deal or an ongoing benefit of your account. However, remember to check the terms and conditions, as some transactions may not qualify for cashback rewards. By using cashback offers wisely, you can usually make your money go further on purchases you'd already be making.
Yahoo
4 days ago
- Business
- Yahoo
JPMorgan May Charge Fintechs for Customer Data. Analysts Aren't Worried.
JPMorgan intends to levy fees against data aggregators, which link banks and fintechs, according to a Bloomberg report.
The Sun
4 days ago
- Business
- The Sun
EBay announces huge shake-up to fees after customer backlash and it's good for buyers
EBAY is making a huge change to fees following backlash from customers - and it's perfect for cheap buys. From today, the online selling platform is reducing the fixed amount buyers have to pay when purchasing an item from 75p to 10p. 1 It comes just months after eBay first introduced fees for buyers purchasing from private sellers leading to fuming customers. The new lower fixed amount applies to all buys excluding cars, motorcycles and vehicles, classified ads and property. A new tiered fee structure will see buyers also pay an additional fee based on a percentage of the value of the item. The fees will be included in the ticket price of the item. This is how the new pricing structure works: As an example, someone buying an item for £5 will pay a 45p fee on top, taking the total cost to £5.45 before postage. This is based on the 10p flat charge plus 35p (7% of £5). Someone buying an item for £1,500 will pay a £36.70 fee on top, taking the total cost to £1,536.70 before postage. This is based on the 10p flat fee, 7% of £20, 4% of £280 plus 2% of £1,200. CHANGES AT EBAY Buyers purchasing more than one of the same item will only pay the 10p flat fee once. EBay said it is launching a live calculator where shoppers will be able to enter the price of an item and find out what fees they'll be charged under the new system. The platform is yet to confirm a date for when this live calculator will go live. You can see how much the new fees will apply to you via From August 6, eBay will also start paying some sellers more quickly. Sellers who have completed at least 10 sales totalling £150 or more in the previous five days and have no more than two unresolved cases in the preceding 12 months will receive funds within 24 hours of sale. This is instead of the current system where sellers have to wait until two days after delivery confirmation to be paid. An unresolved case can include a buyer dispute where you didn't resolve the issue or a case where eBay ruled in favour of the buyer. How to spot valuable items COMMENTS by Consumer Editor, Alice Grahns: It's easy to check if items in your attic are valuable. As a first step, go on eBay to check what other similar pieces, if not the same, have sold for recently. Simply search for your item, filter by 'sold listings' and toggle by the highest value. This will give you an idea of how much others are willing to pay for it. The method can be used for everything ranging from rare coins and notes to stamps, old toys, books and vinyl records - just to mention a few examples. For coins, online tools from change experts like Coin Hunter are also helpful to see how much it could be worth. Plus, you can refer to Change Checker's latest scarcity index update to see which coins are topping the charts. For especially valuable items, you may want to enlist the help of experts or auction houses. Do your research first though and be aware of any fees for evaluating your stuff. As a rule of thumb, rarity and condition are key factors in determining the value of any item. You're never guaranteed to make a mint, however. How does eBay compare to rival platforms? EBay is not the first online selling platform to move towards charging buyers fees instead of sellers. Vinted introduced a buyer protection fee in 2016, coinciding with the removal of seller fees. For orders under £500, this is a fixed fee of between 30p and 80p, plus between 3% and 8% of the sale price. Over £500 it is a flat fee of 3%. Meanwhile, Depop introduced a buyer fee from April 15, 2024, of up to 5% of the purchase price, plus a fixed amount of up to £1 per item. Vinted currently also offers a managed shipping option for sellers, which allows them to choose which carriers they would like to offer to deliver their items. Buyers can then choose which carrier they want to use and must pay that fixed postage cost. Depop sellers can either use Depop Shipping, which is provided by carrier Evri, or they can select "other" and pick their own delivery provider. In terms of holding onto funds, Depop sellers are paid within 10 working days of any sale date or within two to three working days after delivery. Meanwhile, Vinted sellers are paid within two working days of a "completed order". This is when a buyer either confirms "everything is OK", or two days after the buyer gets their order but does not report any issues. .
