Axa Wealth’s head of strategic partnerships said: “There is a growing belief that rebates are complex, and I cannot see advisers and consumers buying rebated share classes when clean share classes are increasingly available, and the HMRC has decided that rebates are all taxable.”
Mr Lee added: “With the introduction of clean share classes, we will definitely see a consolidation in the platform market, and in the next three to five years we will see a narrower platform market.”
Last week, Skandia became the latest platform provider to announce a move to clean share classes while looking to retain unit rebates.
In last summer’s FSA consultation paper CP12/12, the regulator unveiled proposals to ban payments from product providers to platforms and to ban cash rebates from providers. It suggested platforms should only be remunerated through a charge paid by the consumer.
But its successor the FCA is yet to publish its final policy statement, with its platform paper being delayed last December owing to HMRC’s announcement that it was working to clarify its own tax position on rebates, both cash-based and unit-based.
An FCA spokesman said the regulator’s board would be reviewing its policy paper on April 25 with a view to publishing, if approved, the following week.
Standard Life introduces ‘super-clean’ share classes to provide ‘a simpler solution for customers’
The provider is starting its transition to ‘super-clean’ share classes on its platforms, and will remove rebate mechanisms from pricing structures by the end of the 2013/14 tax year.
Graham Dow, head of investment group relationships at Standard Life, said the ‘super clean’ classes would introduce “economies of scale to fund group businesses” and “a simpler solution for customers”.
He added that work to introduce standard clean share classes onto Standard Life’s platforms were progressing rapidly, with more than 90 per cent of assets on its platforms now converted.
Adviser view
Andrew Woolhouse, IFA for South Yorkshire-based Aeon Financial Services, said: “I think the transparency brought on by clean share classes is good. However, ‘super clean’ classes are just repackaged rebates. What we should have are transparent fees for the running of the fund.”
Industry view
Neil MacGillivray, head of Sipp provider James Hay Partnership’s technical support unit, said: “Advisers could find themselves responsible for the deduction of tax and its reporting if they hold the agreement with the client on the rebating of commission.”
