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Fidelity FundsNetwork reveals unbundled pricing model

Fidelity FundsNetwork has revealed details of its unbundled pricing model which will see a flat rate charge of 0.25 per cent alongside a £45 annual account fee.

The unbundled pricing model has launched today and will run alongside its bundled charging structure.

The 0.25 per cent annual charge will be taken monthly from the largest fund held by the client at collection.

There will be no switching charges for those who decide to adopt the £45 account fee, which is optional until next January, but switching charges will apply for those who do not.

Fidelity says a range of physically-backed ETFs will launch on the platform this quarter.

Head of FundsNetwork David White (pictured) says: “Advisers have consistently told us that they want clarity and simplicity, and not more complexity when it comes to pricing. We have listened and strived to build our unbundled pricing model to meet that need.”

In August, FundsNetwork revealed details of the fees it takes from fund management groups for its bundled proposition, showing a 0.25 per cent charge taken from the majority of funds, rising to 0.5 per cent on a  few occasions.

Cofunds is due to launch its unbundled pricing model in July which will be made up of a £40 annual charge and a sliding scale of annual management charges from 0.29 per cent to 0.15 per cent.

Skandia plans to launch its unbundled pricing model in Q4.

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Are you watching FSA?? – Previous bundled structure…..AMC to consumer 1.5%. 0.25 rebated to platform – they’re paid. 0.5% paid to adviser – they’re paid. 0.75% kept by fund manager – they’re paid. New “RDR” pricing structure….AMC to consumer (as per recent “clean” share classes announced by two fund houses) 1%!! – platform charge 0.25%. Adviser charge 0.5%. END COST TO CONSUMER!!!!!!!!!! 1.75%. Those of us doing the right thing are in full support of RDR and it’s intended outcome of clarity and reduced cost for the consumer. We really do want a clear “unbundled” structure. Trying to explain the existing bundled structure is convoluted at best and easy to exploit at worst. But please please can you watch how this is playing out for the consumer. “Clean” share classes of 1% just pass the cost of losing the rebate negotiated with the buying power of large platforms straight back to the consumer.

  2. but Dan, the customer knows exactly who has been paid for what rather than it being an bundled into one easy to understand AMC. Surely thats worth 0.25% per annum of anybodies money, after all its only a 16.6% increase in the price!

    I am sure that if I was buying a new cartoday and the price was £10K, I would be delighted if a Government regulation said that I needed to know how much of that the manufacture / dealer got and that I would have to pay an extra £1,666 for the pleasure of it.

  3. @Dave’s comments very amusing.

    Dan, quite frankly if the the fund was charging 1% and it could afford to pay 0.25% to the platform, was it not over priced in the first place?
    Ok [you may say] but doesn’t the 0.25% represent a far cost for distribtuion and marketing of the platform?
    But then why does the 0.25% get added back on the same platform for no reason after unbundling?
    What a load of old chuff. The funds doing this can be and should be avoided in favour of alternatives

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