Standard Life Investment’s decision to stop all trail commission payments on mutual funds is “scandalous” and “obscene”, say advisers.
This morning Money Marketing revealed Standard Life Investments will cease payments to align new and legacy business “reflecting the spirit of the Retail Distribution Review”.
But advisers say the move – which will see charges fall, but not by the same level as the commission – is an excuse to “pocket the difference”.
Rowley Turton director Scott Gallacher says: “This is another example of Standard Life stealing commission from advisers.
“They’ve acquired assets presumably through advisers with terms of business but now they’re effectively ripping up the contract with advisers, not even rebating all that money to clients.”
He adds: “This is not platform money, it’s disingenuous to quote PS13/1 which has nothing to do with advisers, I think it’s scandalous.”
Annual management charges are typically being cut by around 20bps.
Currently, renewal commission on bond-type funds is 25bps and 50bps on equity-type funds.
Bph Wealth Management partner Adam Bell says: “This will happen more and more, which is no bad thing, really everything should be on explicit fees.
“If they dropped everything by 50bps that would be fine, but to drop it by a little bit and pocket the difference is just laughable.”
He adds: “I think it’s quite obscene Standard Life are saying this is in line with the concept of RDR when they are pocketing the difference.”
Syndaxi Financial Planning director Rob Reid says: “I’m not at all surprised, I’m mystified why anyone would think Standard Life would do anything else.
“They are the first, they will not be the last.”