After the sunset clause came to an end on 6 April, advisers and platforms have been considering the potential fallout.
Bill Vasilieff, chief executive of platform Novia, told Emma Ann Hughes, editor of FTAdviser and Financial Adviser, he believed most platforms would have been ready for it - Novia was “ready two years ago”.
However, he said: “Those really affected were the old fund supermarkets who took rebates and paid commission out from that.
“They won’t be 100 per cent ready. That won’t be possible, they’d lose the contract with their clients. Even a few months ago, one large platform still had 30 per cent of its funds yet to change to a clean share class.”
He said the industry would not see the full impact of the end of the sunset clause until the full accounts of all the platforms come out.
Mr Vasilieff also told FTAdviser he expected other platforms to make changes to the way in which they pay distributions, but not until 2017.
From April 2017, the regulations will change and distributions will be paid gross. Novia already pays gross interest on mutual funds, as it built this facility into the platform.
However, Mr Vasilieff said many platforms may not have anticipated these regulatory changes when they built their platforms.
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This meant that once you have built a platform, it is “very expensive to go back and rebuild.”
That said, he believed it would be “straightforward” for his rivals to go back and change to pay interest gross.
In terms of developments, Mr Vasilieff spoke about the various additions to the fund range on the platform. He said: “We have made changes such as launching smart beta exchange-traded fund portfolios on our platform, through discretionary fund management business Copia, which we believe are the first [such portfolios] in the market.
“Most advisers do not use exchange-traded funds but from what we have seen on the platform the numbers of people using these portfolios is growing rapidly and certainly DFMs are using these widely.”
Yet during a series of roadshows about the new smart beta portfolios, he said advisers had shown great interest.
He also talked about more changes to come from Novia. According to Mr Vasilieff, Novia is developing some new technology that will result in a changed front-end.
This development will give the ability for new functionality and helping to link better with advisers’ back-office systems. This will be ready over the next 12 months with a launch expected early next year.
Read more about smart-beta portfolios in our Guide to Smart Beta, which qualifies for 60m of structured CPD
