Online investment platform Rplan has discontinued trail commission seven months ahead of the 6 April 2016 deadline set under the Financial Conduct Authority’s ‘sunset clause’ rules.
The firm announced that around 48 per cent of their clients were affected by the switch and 83 per cent of these – or 40 per cent of all the platform’s investors – will save an average of £27.64 per year.
Over half (52 per cent) of Rplan’s clients were unaffected by the changes because they were invested in share classes introduced from March 2014 that already met the new requirements.
The bulk of the savings under the conversion were a result of fund managers taking lower investment charges on the new share classes, while a change to the platform’s fee structure also helped.
Rplan has now urged all retail investors to lobby their own platforms if trail commission has yet to be discontinued on their own investments.
Chief investment officer Stuart Dyer said: “Investors should be contacting the platforms holding their assets to ask if the same has been done for them and if not, why not.
“Any platforms that have yet to discontinue trail commission should also be looking to do so as soon as possible in the interests of their clients; it is a complicated process but that is no excuse.”
While most platforms report being well on their way to turning off all trail commission before next Spring, some in the industry are still predicting a troublesome last minute scramble.
European IFA trade body FECIF recently warned that adviser numbers will drop off by around 22 per cent due to the sunset clause, although other trade bodies have said this figures is on the high side.
Keith Richards, chief executive of the Personal Finance Society, said he thinks advisers are better prepared for the sunset clause than “some scaremongers would have us believe.”
Meanwhile, a survey of 196 users of Intelliflo’s adviser software revealed trail commission remained an important aspect of income for 93 per cent of advisers.
It also showed that only 27 per cent had contacted clients to advise on the changes, while 34 per cent planned to by the end of 2015.
However 25 per cent said it would be the end of March 2016.