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Ascentric admin charge move

Ascentric is planning to introduce an admin charge from April for funds on its platform with low assets under administration.

The firm is talking to fund managers about applying a charge of up to £40 a month on funds with assets;below £100,000.

It says the fee will clean up some of the funds that are not actively being used by advisers, cover associated running costs and fund a new suite of management information reports which the firm is introducing to provide fund managers with detailed analysis of investment activity.

Head of marketing Dominic Ventham says: “Where administration charges are applied, the new management information reports will provide a helpful tool for devising app-ropriate future fund distribution strategies.

“Clearly, under the proposed retail distribution review rules, we expect that we will be required to disclose this fully as an income from product providers.”

The Platforum managing director Holly Mackay says: “To some degree, it is inevitable but it is a particularly difficult message for Ascentric because they sell themselves clearly as offering unfettered access to funds and tax wrappers.

“They are not saying they will stop doing that but we know the commercial realities are that it will make it harder for the boutique asset managers to get in front of financial advisers.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Ray Kuhler - Alquity Investment Management 11th February 2010 at 11:39 am

    ‘Funds that are not actively being used by advisers’.

    But what if the fund is performing as expected and as explained to the client and the manager refuses to pay the additional charge?

    Is the adviser then forced to sell and if they are then why hadn’t they prior to this event? How has the client’s requirement changed.

    Seems a strange way for a professional firm to asset allocate.

  2. And what if this creates a Capital Gains charge ?

    This is the “lie” to open-architecture

  3. And what about ETFs or ITs which don’t pay platform charges, As Holly says if you are unfettered then it is a little odd to then charge fund providers just because some IFAs have used your fund. Also what about a group with a fund over say £10m and another sub £100k, On balance if I was a fund group I would be tempted to say no to the £40….

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