FundsNetwork is the second-largest platform in the UK and is a multi-faceted business that services advisers, direct clients and institutions. Its AUA figure of £48bn as at December 2013 includes both retail channels as well as its DC pension book of business. It has an AKG Financial Strength Rating of B for the adviser platform.
Like its competitor Cofunds, FundsNetwork brought in a new head of its adviser proposition in 2013. New boss Pat Shea has outlined an ambitious and extensive development plan for the adviser platform which sits alongside a wider agenda for Fidelity in its D2C, DC, institutional and asset management businesses.
So, what about the adviser platform? Well, as can be seen from the price guide below, it is competitively priced for GIA and Isa business. Now if functionality can (as there are signs that it is) catch up…well, look out, competitors. A big impact on the functionality will likely come from the transfer to platform software provider Bravura and its new Sonata system, with Fidelity set to adopt the technology later this year.
FundsNetwork addressed some of its pension charges pre-Budget with the removal of some ad-hoc fees for drawdown and transfers, leaving a flat 25 basis points platform fee as well as a £45 flat charge. With the new rules on drawdown giving platforms a greater opportunity to hold on to pension assets through retirement, Sipp pricing has shifted higher up the priority list for platforms and could become a highly competitive area.
On day-to-day usage, comments we receive from advisers show real contrasts in their experiences in dealing with FundsNetwork. Perhaps unsurprisingly, “primary” users (those who have the majority of their clients’ assets on the plat-form) are more upbeat than those who dip in and out of the platform.
On investment capabilities and focus, 2013 saw the platform introduce guided architecture ranges for customers and advisers who can select a multi-asset port-folio, a model portfolio or self-select. Fidelity now has a range of preferred asset manager relationships although this is separate to James Bateman’s team, which runs the multi-manager part of the business.
Fidelity and the FundsNetwork platform looks set to remain a powerful force in UK retail financial services across multiple channels.
Holly Mackay is managing director at The Platforum
The Platforum’s take on price
FundsNetwork has one of the simplest pricing structures in the platform market: a flat £45 per year per client and then 25bp on assets. This makes it a competitive platform for mid-range clients – the flat fee makes it pricey for clients with less than £75k and the 25bp fee can look steep for larger clients.
Plumptree Kilby partner Mark Dodd says: Fidelity have spent money making improvements to the platform and have generally done that well. Usability is much improved compared to what it was and the support from their people is good. One criticism we have is that we would like to see a tiered pricing set-up introduced because 25 basis points for large cases still feels quite expensive.
Invest Southwest managing director Dave Penny says: We really don’t have any complaints about Fidelity. They are keenly priced and always come out among the most cost effective when we asses value for clients. They also have a significant marketing capacity meaning clients also recognise the Fidelity brand which gives them comfort.