Where big is best

10 August 2009 10:13 am

Last week Money Marketing revealed that the investment platform is to increase its charges for fund groups from January with smaller funds set to be hit hardest.

All groups will pay more on the platform but the new structure will also take into account asset size and sales.

Funds will be put into one of four pricing tiers depending on the volume of sales with higher sales attracting lower additional percentage fees.

The highest add-on to the annual fee is five basis points but Cofunds refuses to reveal the lowest tier charge and denies there will be a zero level for the biggest and most popular sellers.

Cofunds says this is the first fee hike since it was established in 2001 and the pricing structure will not change for three years.

T Bailey fund manager Jason Britton says: “If platform pricing were to move to a basis that adversely affected boutique fund groups that could cause a problem for advisers.”

Whitechurch Securities managing director Gavin Haynes says: “If it reduces the number of fund groups that feel it is commercially viable to list on Cofunds and therefore reduces the number of funds advisers can select then it could have a detrimental effect and will certainly be concerning for IFAs who put a large proportion of business on the platform.”

Clarity associate director Glyn Bolton says: “The choice on Cofunds is very broad and if it ends up restricting the choice that would be bad news but I can’t imagine they will be cutting their own throat and will have worked it out very carefully so that people will stay on board.”

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