Fidelity platform losses grow

Fidelity platform losses grow

Fidelity's platform business has seen its losses expand as it continues to make "considerable investment".

In the year to the end of June 2017, Financial Administration Services Ltd, which administers Fidelity's platform investments, posted a loss of £15.9m.

This compared to a loss of £15.5m for the same period last year.

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Financial Administration Services posted a decreased turnover of £146m, compared to £173m in the previous year.

Meanwhile its cost of sales fell from £27.5m to £4.3m and its administrative expenses also fell from £166m to £163m.

Keith Bonin, the chief financial officer at Fidelity, said: "The company continues to make considerable investment into its UK platform business and this has been a key contributor to the operating loss for the past two years.

"This investment is expected to be a significant driver for future growth. It aims to deliver a much improved client experience and it will also drive significant efficiencies through the use of improved technology.

"This in turn is expected to help position the business well and ultimately grow market share and profitability."

Mr Bonin added that the company's principle source of income now comes from fees charge to clients rather than the cost of providing distribution and other services to Fidelity.

Earlier this year Fidelity announced that it would move to a “variable fee” structure on its funds over the coming months.

The company said the annual management charge will be cut across all its funds, while performance fees will be introduced but will be “refunded” if, in future, the funds deliver performance that is the same, or worse, than the returns achieved by the benchmark.