AFH to scrap platform fees by end of year

AFH to scrap platform fees by end of year

AFH has said it will scrap platform fees for its clients by the end of this year.

The advice firm, which had previously told FTAdviserit would be taking such action, confirmed it would be happening by the end of 2018 and said this would make it the first adviser in the UK to scrap platform fees.

Alan Hudson (pictured), the chief executive of AFH, said: "Platforms are too expensive anyway, and as it’s mainly advisers who benefit from using them, we don’t think it’s right that our clients pay for them.

"We believe that investment returns in the future will on average be lower than they have been historically. That means we have to look to reduce third-party costs wherever possible, so our clients can achieve sufficient net investment returns to meet their financial planning objectives."

Foster Denovo is another advice firm which is considering absorbing platform costs for some of its clients.

Mr Hudson predicted this would become more common across the financial advice industry.

He said: "For us, it wasn’t a question of whether but of when. This is a natural development of our strategy to make investment advice accessible and improve outcomes for our clients."

Earlier this year AFH revealed it had reached deals with six fund management companies to run segregated mandates on the company's behalf, which Mr Hudson said would provide savings of between 15 and 22 per cent to the advice firm's clients.

AFH, which is listed on the Aim, currently has about £3.2bn in funds under management.