Amendments to trail commission on a number of fixed interest, property, tracker and money funds have also been attacked for being included in the small print of the proposals for the combined Skandia/ Selestia platform. Renewal commission on fixed interest and property funds has been cut from 0.5 per cent to 0.35 per cent while commission on tracker funds has been halved to 0.25 per cent and cut to zero on money market funds.
Sheffield-based Warnes Anderton IFA Glenn Warnes says: “Since the merger of the two wraps, they sent through the terms and conditions outlining they have changed their basis of commission payments.
“This cut has reduced my income by about £3,000 a year or about £60,000 renewal over a 20-year period. I did not ask them to merge platforms. If this was just on new customers then fine but to apply this retrospectively is just terrible.”
Hargreaves Lansdown senior adviser Ben Yearsley says the property fund changes will affect thousands of advisers.
He says: “It does not surprise me with regard to trackers and fixed interest funds but property has an annual management charge of 1.5 to 1.75 per cent so there is no reason for them to do that. I cannot imagine Cofunds and FundsNetwork following suit so surely the Skandia/Selestia platform will lose business at such a competitive time for the platform market.”
Skandia platform marketing manager Peter Jordan says the changes have been made to ensure the platform is economically sustainable and to avoid the build-up of legacy systems by running separate pricing for Selestia and Skandia clients.
He says: “The changes will help to secure the long-term future of the platform. Adopting the same structure for all Selestia and Skandia MultiFunds clients is a key aspect of ensuring sustainability as it avoids maintaining legacy business on less favourable terms.”