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Fidelity says rebate deal needs to be industrywide

Dymott: ‘Always been open’
Dymott: ‘Always been open’

Fidelity FundsNetwork would disclose all rebates it receives from fund firms as an alternative to an outright ban on bundled pricing but only if disclosure was required across the whole platform industry.

Head of UK fund partners Ed Dymott said the FundsNetwork platform would be prepared to publish rebates in full if this was enforced industrywide.

He said: “It is not a complex process to disclose rebates to customers. Fidelity has always been open. A fund manager who has got a 150-basis-point fund on the platform we charge 25 basis points for administration. That is our fee.

“If the FSA were to ask us to offer this information, we would do that. That would need to be done as an industry though because if we just do it off our own back it would put us at a competitive disadvantage.” But Skandia platform marketing manager Jeremy Mugridge said: “I am not going to commit to Skandia disclosing
rebates at the moment on our bundled charging structure.”

He said there needed to be more focus on disclosure of performance fees. He said: “An adviser does an illustration with a client on our platform. If there is a performance-related fee on the fund, we disclose that and
include it in the total expense ratio. We have done an analysis of many other platforms and that is not included. It is not just about whether you bundle or unbundle, it is what costs to the client you include and disclose.”

As part of their response to the FSA’s recent platform discussion paper, Fidelity and Skandia both called on the regulator to allow them to offer both bundled and unbundled charging structures. In the paper, the FSA said it was minded to ban bundled pricing.


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