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Ascentric among platforms eyeing switch to fixed costs

The Platforum says “received wisdom” of basis points charging needs to be challenged.

Ascentric is considering changing its charging structure from a purely basis points structure to a hybrid model involving fixed costs.

Ascentric chief executive Hugo Thorman says his firm has considered offering clients the option to pay a flat fee for the account with a separate bps charge which bundles in Ascentric’s existing dealing charges. Ascentric currently charges a bps fee on assets on the platform.

He says the alternative pricing model model could be introduced as an option for clients in the future, though is opposed to charging solely on a fixed costs basis. 

Thorman says: “There is an inherent risk in having more assets on the platform and fixed cost also risks squeezing smaller clients out so we would not support a pure fixed cos model.”

Money Marketing understands another platform is also considering a switch to fixed fee charging in the near future.

The Platforum managing director Holly Mackay says: “Ultimately we all need to challenge the received wisdom that is bps charging. However, platforms need to be profitable, they need to be sustainable and fixed cost structures can penalise smaller clients.”

The Lang Cat principal Mark Polson says: “I expect more and more providers to investigate the possibility of moving to fixed cost pricing. A combination of fixed price and bps allows platforms to share in some of the upside as assets are accumulated but charges will not eat into revenues for clients quite so much.”

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