Platforms stake charging positions

Jostling for market position in a unbundled world has begun, with several major platforms making changes to their charging structures.

Standard Life has announced a re-pricing of its wrappers, details of which are shown in the Table, while Cofunds has removed its £40 per annum charge for clients who use unbundled share classes.

The changes mark an ongoing drive by platforms to secure their positions as market players move towards a completely unbundled structure.

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For Cofunds, the removal of the £40 fee brings it back into consideration for clients with smaller portfolios. Although the amount was not huge, for investors with relatively low asset levels, the charge could have been a relatively high percentage of their portfolio compared with other fees payable.

The move – which Cofunds said is linked to its acquisition by Legal & General – puts the platform provider back on the map for lower-end clients. It announced its unbundled charging structure in September 2012, with charges starting at 0.29 per cent for investments up to £100,000, lowering through a scale to 0.15 per cent for investments exceeding £1m.

While other platforms have opted for single pricing across the board, Standard Life has reasserted its drive to attract ‘quality advisers’ by offering ‘core terms’. These are typically available to firms with more than £20m of wrap assets on the platform and, in each tier for Sipps and bonds, are 10 basis points lower than the standard terms. Charges for Isas, personal portfolios and cash are the same for standard and core terms.

Standard Life said, as an example, Sipp clients with £200,000 or more invested in funds would see a reduction of up to 16 per cent in charges.

Other platforms have been making movements too; knowing that the regulator expects most advisers to use more than one platform post-RDR, there is scope for attracting new business.

FundsNetwork said in mid-October that all new business would be in clean share classes from 9 December onwards, with a £45 annual fee and 0.25 per cent service charge.

Aviva – whose charges are separated by pension, Isa and investment portfolio – charges between 0.2 and 0.4 per cent. It has made it clear that it is targeting ‘mid-range’ clients, although head of platform proposition, Phil Ralli, said it is up to the adviser to decide which clients should use the Aviva platform.

“Rather than focusing on a specific type of adviser, we have focused on specific types of client,” he said. Clients likely to be suitable would have straightforward financial planning needs, he said, that could be met by straightforward products and solutions.