Advisers add to protest over Cofunds' fees
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In an open letter to Cofunds CEO Brett Williams, Dennehy says this change in direction has seen advisers, representing £2bn of assets on the platform, and the fund management industry banding together against the firm.
He says the advent of Legal & General as a shareholder appears to be the catalyst for loss of focus and internal confusion. Dennehy says: "The unholy rush for an IPO risks minimising the value of the business, which at its core is a simple one."
He also accuses Cofunds of stumbling towards an asset-gathering model rather than being a utility for advisers.
His comments come after 18 fund firms held a meeting on September 10 to discuss ways of challenging the fee rise.
Under the Cofunds' plans, firms are to pay increased fese based in part on new sales into their funds and in part on existing assets. The lower the level of sales on the platform, the higher the fee rise. It is the ringfencing and charge being applied to the back book of business on Cof-unds which is most contentious for providers. There are concerns that the deal will set a precedent and lead to rises in charges by other platforms.
Concerns have also been raised about the platform's intention to start a guided architecture programme with OBSR.
Old Mutual, Baillie Gifford, Martin Currie, Marlborough, Neptune and SVM are all believed to have taken part in the discussions as well as one of the platform's shareholders, Jupiter.
Reportedly absent from the talks were M&G and Invesco Perpetual, the two biggest groups in terms of Cofunds' sales.
Cofunds marketing and proposition director Alistair Conway says: "It is important that Cofunds becomes more profitable after ploughing money into its infrastructure and we want to reward shareholders.
"IFAs want to secure business with platforms they know are sustainable and robust in their negotiations with fund managers and we do that. I am disappointed with Brian Dennehy's comments but we will look to address them directly with him."
As for the recent meeting between fund managers, Conway says: "Anyone has the ability to leave the platform but no one has notified us of any intention to do so. The conversations I have had with groups have been very contradictory to what was apparently discussed at the meeting."
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