I am writing in response to Peter Hargreaves’ article recently about our intention to offer a choice of commission and/or fees.
In my recent meeting with an MM reporter about the issues raised by the FSA’s recent paper on platforms, I did indeed mention that we plan to offer the administration of fee-based services for firms which prefer this option. We are currently implementing systems to support this initiative.
I would like to allay Peter’s worry that we are trying to smuggle out commission in a different guise. I have no quarrel with his views about simplicity of pricing (and indeed on financial services advertising).
The recent FSA paper on platforms asked for greater disclosure and transparency of all costs, commission and other “marketing incentives” in financial promotions and I am on record in the interview as welcoming this.
It is important to remember that Cofunds is an independent administration company focused solely on meeting the needs of the intermediary market and their customers.
We are not a product provider and we do not set fund costs or comm-ission rates. These are decisions for the managers whose funds are on the platform.
For us, marketing should not be about pushing what a company wants to sell but about providing what the market wants to use.
We will only continue to grow if we continue to expand the range of services which intermediaries want to use.
The number of firms opting for fee-based services seems to be increasing and the retail distribution review looks as though it will in due course create further demand. Cofunds is responding to this change.
We will provide full details of how our feebased options will work when we have completed our systems’ review. To the best of our ability, they will work in the way that best suits fee-based advisers.
We can only continue our exceptional rate of growth if we continue to meet the different needs of all types of intermediary, whether they are executiononly, commission-based or fee-based.
Chief executive officer,