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IFAs challenge Skandia move to impose fees

Industry figures have questioned whether Skandia should apply maximum fees to its post-RDR adviser-charging structure.

Last week, Skandia started taking advance applications to convert clients to adviser-charging through its platform, Skandia Investment Solutions.

Clients are being asked to give authorisation for Skandia to pay their agreed fee to their adviser from January 2013.

The new structure will allow monetary or percentage charges via initial, regular, switch and ad hoc fees. It will impose Skandia’s current capped limits of 4.5 per cent for initial fees, 3 per cent for switching fees and 1.5 per cent for ongoing charges.

Investment Quorum chief executive Lee Robertson says: “I do not think it is for platforms or providers to set maximum limits on charges after the RDR. This should be down to advisers to decide with their clients.”

The Lang Cat principal Mark Polson says: “It feels a bit disrespectful to set maximum limits where it should really be down to the adviser to decide what they charge. Maybe a more sensible thing to do would be to monitor the adviser fees on the platform rather than having specific caps for advisers.”

A Skandia spokesman says: “The limits on charges via our platform are nothing new. They have been in place for years, are well known by advisers that use our platform and are in line with TCF considerations. It is important to note the average charges taken via our platform are significantly lower than the limits in place.”

Skandia will be the last of the traditional fund supermarket platforms to reveal their unbundled charging structure. It is due to be announced in the fourth quarter.

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