His firm is now providing a new service designed to give them a better return than they get from having their money in the bank, without having their returns swallowed by fees.

Lee said growing compliance requirements made it hard for small firms to add value for their clients beyond the fees they had to charge to cover costs.

Bigger firms had reacted by saying they would not even bother with smaller clients, he said.

“They can take on a client and offer them broking only with less liability but for big firms unless you have at least half-a-million, or in some cases $1 million, they say the cost of compliance is too great, they don’t want your business.”

He said his average client would have investable wealth of between $400,000 and $600,000. The industry needed a better way of catering for people with $100,000 to $600,000 to invest, he said.

Some were tackling the problem by taking a percentage fee of about 1.5 per cent of a portfolio annually, he said, and brokerage when the investor bought or sold shares.

But he said even this was too onerous in a low interest rate environment.

“A person with $400,000 is up for $6000 a year If they are investing at today’s yields, with bonds returning 3% to 4%, their income is maybe $18,000 and then they pay $6000 in fees, after tax they might only get $9500. That’s a 2-point-something return, less than they could get from the bank.”

Others might be encouraged to take more risk to better their returns but that was not always suitable, he said.

Lee’s firm is now offering a fixed fee,  of $340 plus GST, whatever their wealth to invest. Clients can operate as broker clients for nothing and access information through the internet. They are helped into investments such as bonds that do not have to be adjusted very often.

“We help them get 5% or 6%, the difference without the fee is huge. Big firms should be doing the same thing, being more altruistic,” he said. “If the big firms don’t do it there’s  a risk these people either won’t get advice or will just buy the advertising they see in the papers or fall into the hands of half-wits.”

He said the response to the firm’s new structure had been good.