Advisers responsible for an estimated £11.3bn of assets with Cofunds have not yet moved their clients into a sunset clause-compatible charging structure.
According to figures from Cofunds, an estimated £26.6bn has been transferred from a commission structure into explicit pricing, but there is still 30 per cent of its total assets left in commission-paying products. Cofunds hopes to move these clients over before the end of the year.
Last week, Cofunds started sending out letters directly to clients to inform them of the changes and to serve them notice that their assets will be switched to a new charging structure on a particular date.
Stephen Wynne-Jones, head of marketing at Cofunds, said: “We took a slightly different approach to this than a lot of our competitors. The relationship we have with our end investors is through financial advisers so we thought we should not take the lead, we felt the financial adviser should.
“We have got a strategy which is now coming to a head but we are entirely confident we are going to get there.”
Mr Wynne-Jones said Cofunds was planning on being 100 per cent sunset clause-compliant by the start of 2016.
L&G bought Cofunds two years ago in a deal that valued it at £171m. In 2014, Cofunds posted a pre-tax profit of £7.7m, although net inflows halved from £10.1bn in 2013 to £5.4bn.
To the end of June 2015, there were £37.9bn of retail assets, and £36.7bn of institutional assets, according to the latest report and accounts.
Mark Polson, principal of platform and specialist consultancy The Lang Cat, said the impending sunset clause posed questions for advisers as much as platforms.
He said: “For me the real story here is how prepared advisers are for the impact on their business of moving people to explicit pricing because often the last ones to be moved are the inactive clients.
“The main issue Cofunds will have is the communication, and making sure advisers know what’s going on because they quite rightly do not like platforms writing directly to their clients. I am sure platforms will have some problems with the sunset clause and some people may have to work over the weekend to get it sorted but in the main it will be fine.”
Standard Life bulk-switched all its clients by the end of 2013 while Ascentric, Alliance Trust Savings and Novia have also bulk-switched.
Trystan Lewis, a financial adviser with Cheshire-based Griffin Wealth Management, said: “I think most advisers are aware of the changes but there will be a few clients in IFA practices whose business has been going for many years but who have lost contact with the adviser.”
Correction as at 29 October:
The story originally carried the following: “Advisers responsible for approximately £22.8bn of assets with Cofunds have not yet moved their clients into a sunset clause-compatible charging structure.
“According to latest figures, an estimated £53.2bn has been transferred from a commission structure into explicit pricing, but there is still 30 per cent of its total assets left in commission-paying products. Cofunds hopes to move these clients over before the end of the year.”