View more on these topics

MM leader: Look beyond the ‘super’ platform PR circus

Whilst most of the media’s post-RDR focus has centred on adviser charging, platforms are also having to think long and hard about their fee structures.  

This week we report that Ascentric is considering a move to a fixed fee approach whilst Cofunds has scrapped its annual fee as part of a review of charges. 

Most platforms, with Alliance Trust Savings a notable exception, operate a charging model based on assets held. 

Many operate a tiered approach depending on asset size. However, there are awkward questions to be answered over whether the charges associated with larger levels of assets can be justified.

There may be an extra burden on platforms associated with big orders and the increased risk involved, but whether this equates to the current differences you see in fees depending on asset size is questionable. 

Alongside the debate on platform charges, we also have the PR circus around the preferential share classes platforms are looking to negotiate with fund groups.

Certain platforms may have won an early PR victory by persuading some media outlets to use an outrageously loaded and subjective term (super clean) to describe the deals they have negotiated with fund groups.

But if Standard Life’s underwhelming announcement is anything to go by these type of deals are unlikely to revolutionise the market.

A few basis points shaved off a few funds is not likely to influence selection and we will have to hear about some serious discounts on popular funds before most advisers will sit up and take notice. Whilst details on individual fund deals are yet to be announced, asset managers are more likely to offer lower charges on newer or less popular funds.

It is likely that most platforms will end up having access to the various different new or institutional share classes being touted. Without considerable levels of assets these new share classes could attract additional expenses which cancel out the lower AMC. 

Any pressure to drive down costs to the investor should be welcomed. However it is hard to shake the sense that these deals are more about marketing the platform to advisers than anything else. 

Whether this trend translates to lower costs for the end investor remains to be seen. 

However, it is likely that other issues, such as overall fee structures, sustainability and service levels are likely to have a more dramatic effect on the way the market shapes up.

Recommended

Holly-Mackay-2013-700x450.jpg
2

D2C platform surge fuelled by bank advice exits

The direct to consumer platform market has been boosted by clients who used to be served by bank advisers, according to The Platforum. Speaking at a Tisa event on platforms in London this week, managing director Holly Mackay said anecdotal evidence from D2C platforms indicated they were seeing most of their new client uptake coming from […]

Standard Life Graeme Dow 700x450.jpg

Standard Life agrees preferential terms with Old Mutual

Standard Life has secured its latest preferential share class deal with Old Mutual Global Investors. The company announced last month the first group of managers with whom it had agreed terms. These were: Henderson, Investec Asset Management, Neptune, Schroders(including Cazenove funds), Standard Life Investments and Threadneedle Investments. Standard currently receives a 55 per cent rebate on OMGI […]

Survey cover

EEF/Jelf Employee Benefits Sickness Absence Survey 2015

EEF stated in its 2015 EEF Manifesto that the UK’s growth prospects depend on people being fit, working and productive. Keeping people in work and helping people return to work is very important for the manufacturing sector. It means boosting productivity by getting people back into work as early as is possible, as well as fostering workplace cultures and environments that proactively manage individuals’ health conditions so that all can benefit from lower sickness absence outcomes.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. I really think we need to be careful about the language we are using to describe new asset classes. clean and super clean especially. If this lexicon continues don’t be surprised if the national personal financial press start writing about the industry admitting everything it has sold in the past was dirty.

    I am not saying that is true but present positioning is inviting such assumptions. Sadly they would make good headlines but if this happens the marketing departments who dreamed up such terms will have made such headlines possible.

    Also are we not encouraging a perception, which if we say it ourselves will be magnified by the national media, that price = value? Whilst accepting that price is part of the picture it can also vary significantly over time and be impacted by other factors.

    Is it time to move the debate on to how we demonstrate value for money and help consumers gain better insight to their financial future?

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