Zurich is pressing on with a move to preferential pricing for its platform by extending the range of ‘superclean’ funds which offer discounted pricing through bespoke share classes, despite its own research having found an apparent lack of enthusiasm from advisers.
A further 23 funds from Schroders, including their Tokyo and US Mid Cap funds, brings the number of funds available with ‘super clean’ or preferentially priced terms on the platform to over 100.
FTAdviser previously reported that research from Zurich among over 230 advisory firms found that 85 per cent believed more consistency is needed around fund share classes and 70 per cent said they would welcome funds having a single ‘platform’ share class to aid re-registration.
As superclean shares are typically unique to the platform in question, they cannot be re-registered if a client wishes to transfer and so units would need to be converted or sold.
The largest proportion of intermediaries, around four in ten, said they prefer straightforward ‘clean’ share classes, while around a quarter said they preferred the preferential superclean shares, which are offered to particular platforms and are often around 10 to 30 basis points cheaper.
The research also found that close to half of advisers do not think it is positive for transparency that the industry is offering differently priced share classes for the same products.
Alistair Wilson, head of retail platform strategy, said it continued to roll out the deals as price continues to be a focus for advisers and their clients, but that it would focus on ensuring clients could convert easily if they wished to transfer out.
“We recognise that offering ‘super clean’ can sometimes have an impact on the speed and complexity of re-registration between platforms, and so we will continue to ensure that all superclean share classes on our platform have an equivalent ‘standard’ clean share class available for everyone to access.”
‘Superclean’, or bespoke, share classes have been lauded by some as moving funds closer to ‘factory gate’ pricing, but have also proved controversial amid accusations they are often offered in return for pledges of minimum distribution levels and that they constitute a conflict of interest.
Additional reporting by Ashley Wassall