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The Share Centre set to cut charges after FCA pricing pressure

Spotlight on charges 700x450.jpgThe Share Centre is lowering its ongoing fund charges by 25 basis points after mounting regulatory pressure on price competitiveness.

In the FCA’s interim report on the asset management industry, The Share Centre and Hargreaves Lansdown were noted among the most expensive firms when considering total costs of services on a mid-risk rated portfolio.

But The Share Centre investment manager Sheridan Admans says costs look high because the firm employs active fund-of-funds which have higher charges associated with them due to costs of underlying investments.

However, he adds: “We recognise that cost is important and are working on reducing the headline OCF. We will be reducing this by a circa minimum 25bps later in the year.”

This change will be applied to the Positive, Cautious and Adventurous portfolios. 

A guide to direct-to-consumer platforms this month from consultancy The Lang Cat shows total cost at The Share Centre for a £50,000 portfolio is 1.94 per cent, while for Hargreaves it is 1.84 per cent.

But as already flagged to the FCA, The Lang Cat consulting director Mike Barrett says it is “unfair” to compare Hagreaves with The Share Centre as they serve different kind of customers.

Barrett says: “Hargreaves proved the market isn’t price sensitive. They are expensive but customers like them and are happy to pay more.

“The price reduction for The Share Centre makes sense. Their more sophisticated customers know what they are doing.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. This is very unfortunate publicity for a platform that is actually way the cheapest in the market. These charges are for their own ready made solutions – presumably for those too ignorant to make their own decisions. If you have (say) a Self Select Stocks and shares ISA (Including collectives) believe it or not the cost is an incredibly cheap £4.00 + VAT per month. This is a flat fee and irrespective of portfolio size. It works out at £57.60 p.a. Yes there are dealing charges but these too are very modest.

    I defy anyone to find a cheaper platform.

    Perhaps the Regulator and journalists need to do some proper research. The Times also used their ready made solutions and made no reference to Self-Select.

  2. Julian Stevens 5th July 2017 at 8:12 pm

    We are not a price regulator….

  3. The fixation on costs rather than on value could easily lead to consumer detriment – and as Harry points out, the reality is often different to the perception.

    Having said that, both appear to potentially cheaper or at least in the same ball park as the multi-billion holding Jupiter Merlin suite of funds….

    I’m all for value, but I feel that there is a danger that consumers will be pushed away from focusing on value and instead focus on cost.

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