PlatformsApr 5 2013

Skandia shifts emphasis to clean fee share classes

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Skandia has signalled its intention to favour ‘clean fee’ share classes, which strip out commission and platform payments, to reduce client tax bills.

The platform currently rebates in full any commission and platform fees contained in bundled share classes to the end investor, but following HM Revenue & Customs’ decision last month to tax these rebates Skandia has decided to list lower cost share classes already available from fund managers in order to reduce any tax bill.

Skandia said it would continue to pass on unit rebates “where possible” from clean fee share classes, to reduce costs.

The platform is in discussions with fund managers about launching new, even lower cost share classes to reflect the net price of a fund with a rebate, but a spokesperson for the company said its emphasis would be on quickly rolling out standard clean fee share classes.

“The addition of clean share classes will complement Skandia’s existing fund range and will be available across all products on its unbundled platform, where rebates are paid in full to customers in the form of units,” Skandia said in a statement.

“This development will enable advisers and their clients to select the share class most appropriate to their individual circumstances, including their tax status.

“Moving to clean share classes that already exist in the market and paying a rebate is expected to be the more immediate solution but does not preclude moving to preferentially priced share classes when available.”

Skandia has also stated that its unbundled pricing structure, unveiled at the end of last year, can accomodate a tax on rebates. Transact yesterday said it was ready for the introduction of the new tax.