View more on these topics

Customers may be hit by cost of unbundling

Advisers are concerned that Cofunds’ unbundled pricing model will result in higher costs for consumers.

Last week, Cofunds revealed the details of its unbundled proposition. Assets up to £100,000 will be charged 0.29 per cent while between £100,001 and £250,000 they will be charged at 0.26 per cent.

Assets between £250,001 and £500,000 will be charged 0.23 per cent, between £500,001 and £1m will cost 0.2 per cent and over £1m the charge is 0.15 per cent.

Cofunds says it is requesting a clean share class from fund managers for the unbundled model, which would equate to 0.75 per cent on manypopular funds, and has removed switching charges. The unbundled proposition is to launch around the middle of next year. Clients can stay with the bundled proposition if they wish.

Thomas and Thomas Financial Services managing director Darren Lloyd Thomas says: “Unbundled pricing is sadly going to come at a cost for the customer.

ransparency is all very well but what people really want are low costs. Because platforms can use the bundled, less transparent model to negotiate better prices from fund managers, it is ultimately the investor who is losing out in an unbundled model. I think initial costs on an unbundled structure will rise.”

But Investment Quorum chief executive Lee Robertson says: “The charges seem cheaper than I would have expected. I think the scale the firm has achieved will enable it to dictate the share class.”

Cofunds says it will not follow Fidelity’s lead in publishing the fund manager payments it receives from its bundled proposition, which will continue to be offered until the FSA changes the rules on rebates.

It says it is expanding its product range and will soon make a junior Isa available via its execution-only service. It is also launching a pilot with stock broking firms to make exchange traded funds, individual securities and investment trusts available via the platform.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com