Platforms  

Mark Polson report exposes UK’s priciest platforms

Outspoken platform consultant Mark Polson has named the UK’s most expensive fund platforms, in a report that reveals giant cost differences across the industry.

The report alleges that a typical investor with a £100,000 portfolio could get stung for £540 every year using Aegon’s ARC platform.

Investors who use Gloucestershire-based Avalon or Novia could be hit with £500 of fees per year, while Transact charge £440, Mr Polson alleges.

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However, if the same investor opted to use the Alliance Trust Savings platform they could have held funds for just £98 a year - a saving of £442 just for choosing the right platform.

For investors with a £5m portfolio Avalon appeared to be the most expensive platform, while Alliance Trust Savings again appeared to be the cheapest, according to the report.

However, while the price differences remain compared with The Lang Cat’s last pricing report, published a year ago, platforms in general appear to be bringing prices down.

Of the 10 major platform events of the last 12 months highlighted by Mr Polson at the start of the new report, nine of them involved platforms cutting their prices.

Speaking to Investment Adviser, Mr Polson slammed platforms for putting too much emphasis on marketing the “value” they add for advisers.

“The pressure on price is overwhelmingly down,” he said. “The platforms feeling the pressure most are those who are least clear in what they do and the ones who bang on about value.

“Value is individual – the value of Axa Elevate’s Sipp will be completely different for one client than it is for another, for example. You can’t talk about value. Instead you can be very clear about what your platform does and who it is for.”

He praised providers at either end of the price scale, highlighting Transact as having “brilliant” service even though it is an expensive proposition, particularly for smaller portfolios, according to The Lang Cat’s calculations.

The cheapest platforms for an Isa or general investment account...

£100,000 portfolio

PlatformActual cost per year
Alliance Trust Savings£98 or £120 (two fee options)
AJ Bell£230
Standard Life Fundzone, Aviva£250

£5m portfolio

PlatformActual cost per year
Alliance Trust Savings£98 or £120 (two fee options)
James Hay£4,500
AJ Bell£5,000

... And the most expensive

£100,000 portfolio

PlatformActual cost per year
ARC (Aegon)£540
Avalon, Novia£500
Transact£440

£5m portfolio

PlatformActual cost per year
Avalon£25,000
True Potential£20,000
Raymond James (pricing option 1)£16,500

Source: The Lang Cat. Prices include assumed trades.