Superclean has little effect on adviser platform choice

Superclean share classes are having little effect on advisers as the cost saving is not enough to influence which platforms advisers would use, a survey by adviser-owned wrap Nucleus has revealed.

The survey of 125 advisers, which was revealed at Nucleus’ annual strategy event at the Forest of Arden, found that 76 per cent of advisers do not think a basis point reduction would be meaningful enough to influence their choice of platform.

The majority of advisers said it would take a reduction of 10 basis points or more to influence their platform choice, while only 1 per cent said a reduction of 1bp would be meaningful enough.

Article continues after advert

However, in January Hargreaves Lansdown unveiled its post-cash rebate ban pricing and the headline discounts it had secured across its Wealth 150 range, with the drop compared to the ‘standard’ clean annual management charge across its core range of 90 funds coming in at an average of 0.11 per cent.

While these prices may eventually come to represent a new lower market rate - other platforms such as Fidelity have since claimed to have secured improved average terms, for example - Hargreaves said it had secured the best ‘superclean’ deals on 27 funds that would form what it called the ‘Wealth 150+’.

The average AMC on this list was said to be 0.54 per cent, compared to a standard market AMC of 0.70 per cent for the same funds.

Furthermore, the survey found only 12 per cent of Nucleus members felt they had to make significant changes to their due diligence process as a result of the Financial Conduct Authority paper PS13/1, Payments to platform service providers and cash rebates from providers to consumers.

Nucleus members said they expect continued business success with 38 per cent feeling “extremely confident” for future business over the next three years and a further 51 per cent feeling “very confident”.

New business optimism is also high among Nucleus members with 60 per cent expecting to increase the number of clients they deal with.

Barry Neilson, business development director at Nucleus, said: “It is always refreshing to see that our members are focused on organic growth and the development of their business. These findings really cement our belief that Nucleus members are some of the highest quality financial advisers operating in the UK.

“Our annual Census provides a huge opportunity for us to connect with our member firms, really find out what makes them tick and where their business is headed going forward. It allows us to make sure we have the needs of the advisers who use our service at the heart of our proposition.”