Bestinvest chief executive Peter Hall says the firm’s new platform Select fills a gap in the lower-cost platform market.
Last month, Bestinvest launched Select, which is powered by SEI, and a new Sipp offering, Best Sipp, as part of its plans to become the leading investment advisory business in the UK over the next three years.
Hall says the high fund manager charges presents an opp-ortunity for Bestinvest, given its scale, and the RDR will bring more cost pressures on both existing platforms and fund managers.
He says: “We are already seeing pressure on fund managers for low-cost solutions, the likes of which we have seen from Schroders, JPM and Vanguard. We will see more of them and for platforms, the cost pressure will also see them having to amend their own models in some instances.”
Select will include Isas and Sipps as well as investment trusts and exchange traded funds, two types of investments that have traditionally been difficult to incorporate on a wrap platform.
Hall says offering ETFs on the platform will not be a problem. He says: “I am surprised that ETFs are not on other platforms. I think advisers have previously been influenced by the rebate they receive from a fund manager and one of the great things about the RDR is that advisers will no longer have the incentive to provide active funds over ETFs. This means we can expect more ETFs after the RDR.”
Hall says the platform, which will have 1,800 funds, will offer families with more than £50,000 in assets an unmatched value in the market by offering discounts of up to 0.5 per cent. This will include Sipps, an area of the market which Hall says many of his competitors do not discount.
He says: “We want people to look at this platform and say, ’this is the one that is going to give us the better deal’. By offering a loyalty bonus of up to 0.5 per cent across all investments totalling over £50,000, we will be offering best of market.”
Hall says Select will also be offering great value for share dealing but acknowledges that it may not be ideal for frequent traders because of its focus on long-term investors.
He says: “Barclays charges £12.50 for dealing while the likes of Hargreaves Lansdown charge between £9.95 and £19.95. We are going to offer share dealing at £7.50.
“On the annual cost of a Sipp, if you hold shares in it, a number of providers charge £200. We are going to charge £100 across the range of investments.”
Hall says Bestinvest is not concerned about the FSA’s forthcoming platform paper, given the flexibility of Select.
He says: “We have had to make a major investment of £2m to take the SEI platform and we have used that to customise the platform and offer what we feel is the best service in the market.”
Hall says Bestinvest also has plans to launch a wider advisory service and model portfolio service.
He says: “While the platform is a fantastic addition to our service, it is important to recognise that it is only onethird of our business.
“We have a great advisory and discretionary offering and we will be looking to build on that.”