Cofunds’ head of marketing admitted that adviser retention was “part of the mix” in its decision to drop its annual administration charge and set-up fees on pension accounts. But he added that the platform was keen to put pension investments “at the heart of what we do”.
Earlier this month Cofunds announced it had ditched its pension account annual admin charge, cut its drawdown set-up fee to £100 from £120 and cut its annual drawdown charge to £120 from £150.
Mr Wynne-Jones said: “I would be lying if I said it wasn’t part of the mix to cut charges to stop advisers leaving the platform for cheaper options.
“But that wasn’t the only reason. We needed to be more competitive generally, we wanted to encourage people to save on the platform and we felt there was a disincentive at the lower end of the market, with our fee being a barrier.”
Meanwhile, Samantha Christopher, head of proposition at Cofunds, confirmed that in late August the business is set to reveal its long-term strategy – nearly 18 months after Cofunds was bought by Legal & General in May 2013.
This “roadmap” will include implementation dates for new direct-to-investor tools available for clients as well as a stronger Sipp offering for execution-only clients. Ms Christopher said work was “under way” on adding investment trusts and exchange traded funds to the platform.
Currently, advisers have the option to give their clients direct access to portfolio valuations, transactions, correspondence and trading through Cofunds.
Ms Christopher said: “The tools we make available to advisers have to be relevant, but equally we need to be thinking about the end investor too, although it is very much an intermediary’s choice.”
She also confirmed a long-awaited “more developed” Sipp product for Cofunds’ execution-only clients, which include Chelsea Financial Services, Skipton Financial Services, Bestinvest and Chase de Vere.
She said: “We have been incredibly strong in the collecive investments, Isas and investment funds in the execution-only space.
“The Sipp is an obvious extension and is something that holds a lot of excitement for us given our exposure to pension products in the advised space.”
Background
In May 2013 L&G completed its purchase of the 75 per cent of Cofunds it did not already own for £131m. Since then the platform has undergone significant internal restructuring, with chairman Charlie Eppinger, chief executive Martin Davis and head of fund relations Michelle Woodburn all exiting the firm.
In March Cofunds revealed a 16 per cent fall in pre-tax profits to £4.2m for 2013, down from £5m in 2012. Mr Wynne-Jones said the platform expected to announce £11m in annual savings, spread between Cofunds and Legal & General’s legacy platform PMS in 2015.
Last month L&G announced plans to launch a D2C platform using Cofunds technology.
Adviser view
Darius McDermott, managing director of Chelsea Financial Services, said: “Cofunds is working on the execution-only Sipp mostly at my request. That process began in 2006, so we are looking forward to it launching this year. There has been a greater demand for people to hold ETFs, equities and investment trusts – again something we have been discussing over years and we welcome Cofunds delivering this.”
