Transact is reducing annual and transaction charges on its wrap.
In January, Money Marketing revealed that Transact is reducing its platform charges and taking steps to prepare the business for a full stockmarket listing.
From this week, the initial charge will be cut from 0.5 per cent to 0.2 per cent and the annual charge on cash holdings will be 0.45 per cent, down from 0.6 per cent. Transact is also reducing charges per purchase transaction to 0.1 per cent for portfolios whose average value from January to March was more than £1m. That same charge will be removed for portfolios whose average value over the same period was more than £2m. Reductions will be applied as a rebate after the end of each month.
In January, Axa said it is removing the 1.5 per cent initial charge on the bundled pricing model of its Elevate platform. Last month, Aviva announced it is removing the 0.5 per cent initial charge on its platform.
Transact managing director Ian Taylor says: “Most platforms are operating at a loss, even after achieving quite substantial scale. We believe that the platform market is in a perilous position unless it corrects this suicidal pricing.
“However, there is a difference between profitable and sustainable and plain greedy, so we have always tried to maintain a balance between the needs of our customers, our shareholders and our employees.”
Yellowtail Financial Planning managing director Dennis Hall says: “It is not a surprise that Transact has reduced its charges as it was not really attracting smaller accounts. The move is possibly about keeping the advisers they have got.”