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Credit Suisse boosting Pep commission to 5%

Credit Suisse Asset Management Funds is boosting initial commission on its Pep range to 5 per cent in a major attack on the market.

IFAs will be able to take up to 5 per cent as any combination of commission and discount in the form of rebate to clients.

The offer comes into force immediately and will remain available until the end of the tax year. It applies to all lump-sum Pep investments but not regular savings plans.

The initial charge on all Credit Suisse funds is 5.25 per cent. Renewal commission on its Peps is 0.5 per cent.

Managing director Ian Chimes says the higher commission is for the increased work that IFAs are having to do when they make Pep recommendations because of the introduction of the Individual Savings Account next year.

But the move will be a significant challenge to other major Pep providers which are typically offering only discounts on initial charges on selected funds.

Last year, Credit Suisse offered a 2 per cent discount but has opted to give IFAs more choice this year.

Marketing manager Christine Roberts says: "We are handing over 5 per cent and the IFA can decide what he wants to do with it.

"This just gives them more options. If they want to discount more, they can."

Churchill Investments investment director Mark Dampier says he is surprised to see such an offer coming from Credit Suisse.

He says: "I thought it was a bit tacky initially but, at the end of the day, all they have said is that they will give you the 2 per cent discount, which is what they normally do."

Dampier says quality IFAs will pass the extra 2 per cent on to clients although he fears that many IFAs will not.

Leader, p29.

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