Platform consultancy the lang cat has published a report on platform pricing to help advisers with their due diligence requirements, its principal Mark Polson has said.
The 43-page The Value of Nothing: State of the Platform Nation has analysed 17 leading platforms across 10 key portfolio points for general investment accounts, Isas and SIPPs.
Mr Polson said the report has flattened out platform pricing to its “bare bones” and reiterates everything as basis points rather than in confusing jargon such as ‘collars’ or ‘tranching’.
He said: “Tranching, tiering, fixed charges, collars – they are all in there. We do miss out transaction charges, except for Alliance Trust Savings, and set-up charges, as we have never seen anyone come up with a common framework for getting to a baseline price to which conditional charges can be added. That is what we are doing here, and that is why we think it has value.”
The lang cat’s report has also introduced a new classification system for platform pricing, as it believed unbundled, bundled and semi-bundled no longer works, claiming that advisers need an in-depth pricing market overview to overcome complexity.
There is also the ability to compare plaform charges using a common format, which the FCA said was necessary for advisers and paraplanners.
Mr Polson said the format is based on published charging data that includes core custody charges, wrapper charges, dealing costs, set up charges, ongoing costs, cash interest retention, event-driven charges and drawdown charges.
The guide has its own awards section, with Aviva scooping best for active traders, Cofunds for small investors and Alliance Trust Savings receiving best for large investors award.
The report – for sale to providers for £2500 +VAT and £200 plus VAT for advisers, or £150 plus VAT for PFS and IFP members and customers of 360 – is available for download on the lang cat website.
Adviser View
Paul Holiday, financial adviser at Norwich-based GreenSky Wealth, said: “It is definitely something we would look at. Anything that can help with the due diligence process, and help advisers find out about new platform offerings is beneficial to the adviser. It is difficult to find out about all the platforms out there and their offerings.
“It is important also if you are independent and need to justify your independence. Platforms help keep it a competitive market, which is good for the client especially in the new clean shares world, which also falls into the TCF remit.”
