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Artemis to retain full AMC for non-platform deals despite stripping trail

Artemis is keeping its fund charges the same for investments that are not made through platforms post-RDR, despite no longer paying the 0.5 per cent traditionally offered as IFA commission.

The fund group is keeping the annual management charge at 1.5 per cent for the majority of its retail funds for investments of less than £250k, meaning it will retain the 0.5 per cent that has previously gone to advisers.

Most fund groups have launched RDR-friendly share classes that offer access to funds with the adviser commission element stripped out to create a lower AMC.

Artemis says it has decided to encourage clients to access their funds through a platform, where most of its funds are available at 0.75 per

cent plus a platform charge, usually between 22 and 28 basis points.

Artemis sales director Tony van Gool says: “We now do the majority of our business on platforms and we are encouraging clients to do this by offering it cheaper through platforms than direct.”

Informed Choice managing director Martin Bamford says: “The real issue is that if fund managers are not lowering charges when a service has been removed, it is not treating the customer fairly.”



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There are 19 comments at the moment, we would love to hear your opinion too.

  1. I’d love to see how this justifies TCF…

  2. And you are surprised because…,…

    Answers on a postcard to Treasury Select Committee with a copy to the dills at the FSA

  3. It’s not a TCF issue if they are informing potential investors through KIIDs etc.

    That said, how many investors are going to be switching into ‘clean’ share classes from 1st Jan?

    How many (fee-based) advisers are prepared to make this happen at the first opportunity, rather than languish in the higher AMC classes?

  4. It just goes to show who the real winners will be after RDR. The Fund managers will keep the trail and charge the clients the same. The Insurance companies will just turn off trail but they will all keep the cost to the client the same.

    So clients will have the product at the same cost but with no intermediary to tell them if it is still suitable.

    Where was this little nugget stated in RDR? If this is not the plan then surly the FSA should either make the provider rebate it into the policy or make the provider make a payment to the client.

  5. However much the FSA or anyone else might like it to be so, pricing is not relevant to TCF.

    If a company wants to use pricing to influence where they get business from, unless it’s a breach of the client best interests rule in COBS 2.1.1R (a ‘grey area’), they are entitled to do so.

    This is about market forces, not rules. Unless Martin is going to offer a ‘never knowingly undersold’ guarantee to his clients this seems a little rich…

  6. I will happilly bet that the FSA will do nothing about “I am amazed” comments above.

    That will just leave the clients in a worse poition. Now that is totally at odds with the whole idea of RDR. Isnt it?

  7. @Brian, London | 20 Dec 2012 9:22 am

    Fascinating isn’t it. I suspect it will be win-win for most advisers and lose-lose for clients.

    I will be having conversations with clients at annual reviews about moving to clean share classes. Obviously this will incur a fee and an ongoing charge for my advice.

    If the client does not wish to pay my advice and implementation fee to move to the clean share class he will be left in the high AMC class. I provide no further advice but continue to be paid – whoopee!!

    If he wishes to move, he pays me a fee for my advice and administration work in making the change. He then pays me an annual fee for my advice.

    If he wants no further advice but still wants the clean AMC he still has to pay me to move his money.

    Brilliant – thank you FSA. You’re soooo kind.
    Sorry client – but again you have been stuffed by the regulators.

    RDR – the gift that keeps on giving

    RDR – the consumer detriment keeps on coming.

  8. I wouldn’t want anyone to think that this is just a problem with Artemis – it will apply to any fund management group that isn’t facilitating adviser charging, which is most of them.

    Shame on them all!

  9. I have always said the only winners would be providers and fund managers.

    And the FSA will act surprised.

  10. reading many of these comments reminds me why most of the IFA world remains a cottage industry.

  11. @ mark dampier

    Fair comment. At least that way the client gets a half reasonable deal rather than going to one of the big firms that extract money from them on an industrial scale, usually through hidden charges and without them realising…

  12. A typical anonymous comment showing a level of ignorance which is really quite breathtaking.

  13. It’s not a TCF issue, as Artemis (and any other provider) is entitled to operate different prices through different channels. In practice most of us as advisers will buy funds through a platform so the client will benfit from a cheaper price than going directly to Artemis. In fact they’re doing us a favour by providing a tangible justification for using a platform. Conversely, most non-platform business is likely to be from clients without an adviser, in which case Artemis will have to service the client so why shouldn’t they take the 0.5%?

  14. @ mark dampier

    My comment was tongue in cheek and intended as a sarcastic response to yours, apologies if that wasn’t clear. I don’t believe it’s true any more than I think there is any real substance in yours.

    Perhaps if I’d simply said “a typical big firm comment showing a level of arrogance which is really quite breathtaking”, it would have been more palatabe?

    I post anonymously as my comments are a personal view unconnected with the firm I work for. I don’t think that should exclude me from commenting but accept there are contrary views.

  15. I am inclined to agree with Peter Hicks, as a client can get a cheaper deal with advice this way,Artemis admin easier for them on a platform & client can change IFa or switch off adviser charge if they wish

  16. Whilst I agreed with Mr Dampier’s first comment, I would say that’s 2 – 1 to Grey Area. As an observation, I thinks it’s better to be ignorant than arrogant. At least you can warm to someone who isn’t too bright.

    As to the contents of the article, if a product provider wants to make their product less attractive to certain distribution channels that is up to them. It also hands a competitive advantage to advisers.

  17. James Hurdman | 21 Dec 2012 9:45 am

    Pretty sure I would rather deal with someone who knows what they are doing than someone who doesn’t no matter how nice they are.

  18. Have HMRC clarified how the rebate of trail commission will be treated? The provider has been treating it as a trading expense and getting tax relief and the adviser received it as taxable income. The client will be recieving income from an untaxed source and surely have to declare it on their tax return. Or the providers will have to pay the tax and the client gets less of a rebate and has to pay us out of taxed income. ££££ for HMRC Kerrrching!!

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