Consolidator AFH is to scrap platform fees for clients by the end of the year.
The business will absorb the cost of platform fees itself.
A spokesman says the firm has been able to negotiate lower platform fees as a result of its “growing purchasing power” and has already been passing on the benefit of that to its clients.
He says no other costs will increase as a result of the move.
AFH says it is the first advice firm in the UK to cut platform fees.
AFH chief executive Alan Hudson says: “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.”
Hudson believes more advisers will follow AFH’s lead.
He says: “We believe 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.”
Hudson adds: “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.”