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Platforms demand equal share class treatment from fund groups

Fidelity head of business development Ed Dymott

Rival platforms are demanding access to any new lower-cost share classes launched by fund managers and predict it will not be possible for Skandia or Standard Life to receive preferential terms.

Skandia and Standard both announced last week they will move away from their current unit rebate models following the recent HMRC announcement that rebates must be taxed.

Standard Life says it will move to a clean share class model next April and will ask fund groups to offer preferential share classes that reflect the discounts investors were receiving through unit rebates.

Skandia will continue to offer unit rebates through clean share classes but will also pressure fund groups to offer preferential share classes in the future.

Fidelity FundsNetwork and Cofunds say they expect access to the lowest fund prices in the market.

Fidelity head of business development Ed Dymott says: “If fund managers launch new share classes at a lower price, we will look to ensure our customers get access to these. However, there does seem to be a confused position around this view that some of the platforms in the market feel that they can get preferential terms.

“We believe there should be no meaningful difference in the prices we are offered against our nearest competitors. This seems to run counter to the idea of these terms being preferential.”

A Cofunds spokesman says: “Cofunds is confident it will always access the best price for clean funds.”

Transact says it expects access to the lowest share classes and says it would be unfair if advisers receive different access to funds depending on the platform they use.

Chief executive Ian Taylor says: “I do not see how or why advisers should be given different pricing depending on what platform they use. I would expect access to all share classes, especially because any fund prices offered to platforms will be public knowledge.”

David Thompson
Elevate managing director David Thompson

Axa Elevate, Novia, AJ Bell, Aegon, Nucleus and Ascentric all say they will demand access to the lowest clean share classes available.

Elevate managing director David Thompson says: “As and when fund managers make new enhanced clean share classes available we would expect to have access to these to ensure we continue to provide clients with the best possible value in the most simple and transparent way possible.”

Last week, Money Marketing reported Kames Capital will not launch preferential share classes for individual platforms, while other fund groups are considering their options.

Independent platform consultant Stan Kirk says: “If preferential deals are given to certain platforms they will not last for long, because the information will be public and other platforms will demand equal treatment.”



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