Coutts, the UK private bank which is part of the Royal Bank of Scotland group, has confirmed that it is to cease to provide free banking for those clients whose investments, borrowing, or deposits do not total a minimum of £250,000.

Going forwards, those clients who do not meet the minimum threshold will be charged a £150 quarterly fee; it used to be the case that clients could avoid the fee by maintaining a balance of £10,000, the bank said in a statement, but this will no longer be the case.

In a report on the matter by The Independent, a spokesperson for the bank was quoted as saying that the move had been “a difficult decision to make” but one that was necessary due to the increased costs of providing private banking services. The bank’s strategy is to target those with over £500,000 in investable assets, the spokesperson continued, adding, "we are encouraging people to either use our full range of services or to pay the quarterly charge."

It remains to be seen whether the new charging structure will have a negative effect on the bank’s ability to retain – and attract – clients, however The Independent quoted one client as saying that the annual £600 charge was “outrageous” and that Coutts had lost their business.

The charges levied by wealth management firms have been high on the industry agenda this week following last week’s launch of a fee negotiation service by My Private Banking, the networking and lobbying group for private clients.

Carried out in collaboration with GoodValues, a Swiss service set up by the German-Swiss business, Porfolio Consulting, the service draws upon data on fees contributed by its 2,000 members and aims to erode the opacity surrounding private banks’ charges. With the sums involved in wealth management a difference of a percentage point can, of course, make a big difference to investment returns. According to My Private Banking’s calculations, a client paying 2 per cent, or 200 bps to a manager every year, would see his or her returns rise by more than 25 per cent over 20 years if that fee was cut in half.