This week brought some resolution to the romantic-comedy style will-they-won’t-they suspense sparked by HMRC’s announcement that platform rebates will be subject to tax.
Despite the best-laid plans and heated debates about the future of rebates and whether “clean” or “super-clean” share classes are anything but, it seems the HMRC announcement has thrown a monkeywrench into the works.
There followed a public move by Standard Life to push for unique share classes in the next twelve months, as it seeks to move away entirely from unit rebates.
Skandia followed suit quickly in saying it too would move to clean share classes, but a closer inspection revealed that it isn’t straying too far from it’s beloved unit rebates, saying it’ll continue to use these to facilitate minor discounts.
And just this afternoon Cofunds backed the move to ‘superclean’ share classes, saying it will continue to seek the best deal for consumers, including negotiating preferential share classes.
However, a trio of wraps - Nucleus, Transact and Novia - all hit out at these larger platforms, saying fund providers are already “running scared” of striking deals with platforms and that as such their plans would be thwarted.
Subsequently, the head of Axa Wealth’s Elevate platform told fund managers it expects to have the same access to any new cheaper share classes as that of other platforms. A dirty war may yet be fought over ‘superclean’ classes, then.
A more circumspect question is whether or not the euphemistic moniker ‘superclean’ is the correct term for a share class that eschews full transparency in favour of cheaper pricing. Then again, if it drives down prices I suspect few will care.
A separate development on the HMRC ruling saw Transact later announce it will launch a service in the next two weeks, which will automatically calculate how much tax is owed on existing rebates.
Platform woes
Outside of the news on rebates, Cofunds also made the news on FTAdviser this week when it was forced to admit that it is waiving some of its platform charge on any unbundled transaction within a self-invested personal pension wrapper for up to six months.
It’s doing this while it updates its systems to ensure compliance with Retail Distribution Review rules, as at the moment it only allows for investment-based charges to be taken from the client’s main platform cash account, rather than the pension trading account that sits within the product wrapper. It’s a major boo-boo, as if the charges sit outside the Sipp they’d be taxable.
Obviously it’s a nice gesture to waive the fees while this is sorted, but it’s of concern for the firm as it’s not the first instance recently of them making life difficult with charges. It told FTAdviser last month that complexity on how to arrange adviser charges means advisers “often” aren’t paid.
Who’s the HBos?
If rebate taxes don’t get your motor running maybe you’d prefer something a bit more dramatic, like bankers being publicly chastised in front of a row of vote-hunting Members of Parliament. One might wonder about how effective it might be to reinstitute the stocks as a punishment, because really it couldn’t be much worse.
A searing-hot 94-page report called Sir James Crosby, former chief executive officer of Halifax Bank of Scotland, the “architect of... disaster” and, although it said it wanted to be constructive rather than vindictive, some commentators have called for him to be stripped of his knighthood in similar fashion to Fred the Shred. That’ll show him, right guys?
Sir James this morning resigned from an advisory roll at private equity firm Bridgepoint, although the spokesperson very wisely declined to say if he’d jumped or been pushed.
Meanwhile, investors have sued Royal Bank of Scotland over allegedly untrue and misleading statements about the health of the bank months before its government bailout.
Jumping ship
In RDR news we’ve had further evidence of wheeler-dealing going on in the run-in to, and aftermath of, the rule changes.
A story earlier this week in Financial Adviser provided evidence of big adviser firm buyouts being on the rise, with five £5m+ deals done in the final quarter of 2012, two of which were worth between £25m and £100m.
The Imas data from which the stats were pulled also shows that the number of APs within IFA firms and networks fell by 4 per cent between November and December from 34,377 to 32,934, and by a further 3 per cent to January (to 31,810). This equates to a total fall of almost 7.5 per cent.
This news coincidentally arrived on the same day that Financial Adviser reported expansion at Hampshire-based IFA Chadney Bulgin, which has bought Cawley Financial Services.
Additional reporting by Ashley Wassall.
