Standard Life aims to remove all rebate payments within 12 months in a new push for clean share classes, responding to HM Revenue & Customs’ tax on rebates.
The move for standard ‘RDR-friendly’ share classes mirrors that of Cofunds, which has been pushing all managers to list commission-free share classes. FundsNetwork is also pushing for more clean fee share classes to be listed.
In a statement the platform also claimed to have “firm commitments” from key fund groups to launch new, cheaper share classes reflecting the removal of the rebates it currently negotiates with fund managers. However, it has so far refused to name any managers which have backed the move.
“Where rebates are available - approximately 80 per cent of current platform assets - Standard Life is working with fund groups to establish ‘super-clean’ share classes by the summer to pass on the benefit of its purchasing power without incurring a tax liability,” the company said.
These cheaper share classes, which the Standard Life hopes will remain exclusive to its platform, are expected to be introduced over the summer.
David Tiller, head of platform propositions, said: “Today’s announcement marks a strategic move away from using a rebate-based mechanism to ‘super-clean’ share classes to pass on Standard Life’s negotiated enhanced terms to end customers.
“While we maintain that rebates provided an efficient mechanism to allow us to pass on discounted terms, our main aim following the HMRC’s announcement last week has been the protection of customers’ interests.
“We want to provide advisers using our platforms with a simple proposition that still reflects the very competitive terms Standard Life has negotiated with fund groups. Our proposed approach retains customer benefits while mitigating the future tax liability arising from this announcement.”
Standard Life’s move comes in spite of an attack from wrap platforms earlier today. Nucleus, Novia and Transact all warned that many fund managers would be unlikely to agree to cheaper share classes for fear of upsetting other distributors who did not have access to the cheaper price.
In addition, Kames Capital has confirmed it will not be entering into any such exclusive share class deals with platforms.
