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Cofunds to offer payment choice

Cofunds will offer advisers the choice of being paid by fees, commission or a combination of both from the new year in the next stage of its drive towards offering a full wrap.

The platform says the multi-choice payment option will mean advisers no longer have to use a range of platforms for different segments of their client banks.

Chief executive Charlie Eppinger says the development will also ensure that Cofunds is well positioned ahead of implementation of the retail distribution review.

He says he welcomed the FSA discussion paper on wrap and platforms that came out alongside the RDR last month but he believes the regulator is at cross-purposes in calling for fee disclosure to be both simplified and transparent.

Eppinger says Cofunds is happy to provide a breakdown of how the charges on a fund are split between fund manager, platform and adviser but believes this would confuse consumers.

He says: “The problem is that the FSA’s cause is two-pronged. On the one hand, it is calling for charges to be clear, simple and understandable for the client. On the other hand, they want end-to-end transparency. That is hard to do together. There are platform fees but also other distribution charges. That is common sense.”

Eppinger says he welcomes the FSA’s focus on the issue of platform providers offering inducements to advisers to sign up but he says the spotlight on equity stakes has to be broadened to ensure all agreements, including marketing support, enhanced commission, training and transition loans, are treated equally.

He says: “I think that advisers ought to be thinking three, four and five times about joining certain platforms before they are enticed into one of these schemes.”


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