Providers take wraps off RDR propositions
F&C Asset Management and Standard Life have set the retail distribution review ball rolling by revealing their product and service propositions ahead of the January 2013 implementation date.
Unveiling Standard Life’s adviser charging options and plans to help IFAs through the final stages of RDR preparation, Graeme Bold said: “IFAs have a thirst for information to know how providers will support them, whether they decide to go restricted or remain independent. We are putting this information out now to help them plan.”
Standard Life is to introduce explicit charging structures on its key retail products – Active Money Sipp, Retail Portfolio Bond and FundZone – later this year. It will also pass mutual fund manager rebates back to clients, in line with its wrap.
The company is also introducing an explicit tax wrapper charge to cover its costs. Mr Bold said this was not an extra charge, but a different structure to the way the fees already operate.
From June, Standard Life will write to IFAs and follow this up with letters to all of Standard Life’s clients detailing how the charges will work.
Mr Bold said: “We want to give IFAs enough time to plan and support them in their preparations to RDR implementation. The more detail we can give, the more certainty it provides about what we are offering come RDR.”
F&C Asset Management had announced the first phase of its strategy review on 25 October 2011, and this second stage, targeting its wholesale, consumer and property businesses, has specific ambitions to grow its direct business after RDR.
Edward Bramson, executive chairman, said a key driver for the change was F&C’s belief RDR will increase the proportion of self-directed consumer assets.
He said a significant proportion of individuals with £25,000 to £200,000 of investable assets will self-direct their assets, creating a significantly increased target market for F&C.
Mr Bramson said these trends support the growth of multi-manager products, an area of core experience, scale, strength and success for F&C, so the group intends to introduce directly marketed multi-manager and multi-asset products.
F&C is also looking at ways to boost its investment trust marketing, as the asset class stands to benefit from the low-cost nature of the post-RDR world.
Phil Perry, financial planner for Greater Manchester-based Ark Financial Planning, said: “We have been using multi-manager and multi-asset funds anyway for quite some time as we did not think we could offer an advisory proposition on investments to the same standard and detail that a fund manager could.
“This is a natural progression as we move into RDR. Our role is to manage the client’s expectations and if you are tapping into a specialised tool such as a multi-manager fund, you are managing risk and achieving diversification in line with a client’s risk profile.”