Skandia claims that clients investing via platforms such as Cofunds, Transact and FundsNetwork could be paying up to £45m collectively each year in fund manager initial charges.
Skandia says that in addition to switch charges clients are paying up to £58m in unnecessary charges each year.
Skandia claims that FundsNetwork currently has fund manager initial charges on approximately 74 per cent of its funds, Cofunds on around 80 per cent and Transact on at least 52 per cent.
Head of proposition marketing Peter Jordan says: “Those platforms with complicated and expensive charging structures have sought to trivialise the impact of additional costs such as fund manager initial charges, however we should be under no illusion that price does not matter.
“In an economic environment where we are likely to see a period of low returns, every penny counts and price most certainly will matter.
“The use of more expensive platforms will need to be clearly justified to clients and the performance of the client’s investments will need to be sufficient to cover the additional cost.”
