HSBC Bank is planning a brand new discretionary funds service to launch this November offering segregated funds with annual management charges (AMC) from 0.8 per cent.

It is envisaged the AMC will be an all-inclusive fee as HSBC has elected to use institutional share classes eliminating investment management charges for trading in the portfolio. There is no initial charge on these funds.

AMCs will be tiered with funds up to £250,000 charged at 1.5 per cent, £500,000 at 1.1 per cent at investments over £500,000 charged at 0.8 per cent.

The forthcoming service follows last year’s launch of a low-cost service within the Private Bank division centred on exchange traded fund selection, but this launch will go much further.

Five segregated portfolios will be launched holding a full range of asset classes from equities, fixed interest, private equity and property and it will follow a similar vein to the World Selection suite of products in terms of global coverage.

Of the model portfolios planned, the range is broad, from cautious through to adventurous, each with a bespoke benchmark, managed to a risk target.

The target volatility of the cautious portfolio, for example, will be 4.5 per cent and the adventurous portfolio will be 15.5 per cent.

Investors already using the Investment Management Account service from HSBC Trust Company will be offered the opportunity to switch to the new service.

As part of the accompany service, the bank is planning to offer advice on capital gains tax planning and management of individual savings accounts (ISAs).