PensionsApr 14 2014

Platforms look to improve adviser charging options

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Cofunds has become the latest platform to seek to broaden adviser charging options as it announced that both advice and product fees can now pay fees out of the trading account on a number of pension products.

Nucleus also confirmed to FTAdviser that it was looking to introduce the functionality later in the year, saying the option would be beneficial for investors as it would prevent fees from ‘eroding’ the investment held within tax-advantaged Isa wrappers used to hold cash.

Cofunds said investors with pension products on explicit, unbundled pricing are now able to have both the adviser charge and the platform charge taken directly from the trading account of the Cofunds Pension Account, Sippcentre Sipp, Suffolk Life MasterSipp and Suffolk Life SmartSipp.

Cofunds says that using the trading account to make the payment instead of the investor’s cash account provides greater tax planning options for advisers, “as it may be more tax efficient for some investors”.

Stephen Wynne-Jones, Cofunds head of marketing, said: “As one of the biggest platform providers, we’re committed to supporting both advisers and their clients, and these new improved funding solutions provide more flexibility and choice when it comes to paying adviser fees.

“Following our decision to remove the set-up and annual charges on the Cofunds Pension Account, these further changes will help us continue to work closely with advisers to support and grow their businesses.

“Responding to feedback and developing platform services that are of real value to them and their clients are key priorities for us.”

Barry Neilson, business development director at Nucleus, told FTAdviser: “Functionality is on our development roadmap for later this year.

“This structure of fee collection enables advisers to maximise Isa allowances as fees don’t erode the investment held in the tax beneficial environment.

“Similarly it enables the client to benefit from the full withdrawal allowance on the bond as it limits the fees being deducted from this allowance.”

Novia, which has offered the functionality since before the Retail Distribution Review came into force at the beginning of 2013, said the platform faciliates adviser and platform charges from the general investment account.

Bill Vasilieff, chief executive, said: “Novia had this in place before the RDR came in in 2013. Advisers have to be careful where they take the charge from and not from a tax advantaged product when there are other options around.”