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Skandia launches clean share classes with rebates

Peter Mann

Skandia has begun offering 75 basis points share classes on its platform with rebates of 8bps.

Following the HM Revenue & Customs announcement in March that rebates must be taxed, Skandia confirmed last month it will offer clean share classes with rebates.

The platform said last month it is focusing on adding clean share classes first instead of seeking lower priced funds from fund managers as it is the quicker solution to rebate tax, maintains net fund costs and does not hinder re-registration.

Skandia says it will demand access to any lower-priced share classes as they are launched.

The platform’s bundled structure will remain in place for those who want it.

Skandia says its research suggests 87 per cent of clients hold their investment in a pension or Isa wrapper so are not liable to a tax on rebates.

Skandia UK managing director Peter Mann says: “Adding unbundled share classes with lower AMCs but still paying rebates where possible provides clients and advisers with a swift and positive solution to the new tax liability on rebates.

”By operating both unbundled and bundled share classes we will help keep re-registration simple without creating any unnecessary barriers for advisers and their clients.”

Skandia rebates


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. Anthony Rafferty 1st May 2013 at 10:56 am

    Interesting move and I like the boldness of saying they do intend to offer rebates. I can also see the logic given the proportion of clients in tax free product wrappers. Big questions are: who will be first to offer a new clean share class with rebate? Will the bigger platforms be prepared to kick out fund groups if they don’t receive a rebate? Or will it all be done ‘under the counter’ in advertising payments? One thing is for sure – the smaller platforms will continue to argue for no rebates and clean share classes!!

  2. Hi Sam. This is a genuine question honestly. How can this be described as a clean share class when it has a rebate? What is the definition of clean?

  3. Sam Macdonald 1st May 2013 at 2:53 pm

    Hi Andrew, by clean I just meant the 75bps share class – obviously it is not pure clean because there is still a rebate


  4. Thanks Sam. It might just be me, but I would prefer it if “clean” meant “no rebates”. Otherwise we are all going to get into double-speak of “clean” and “super clean”! But I might be missing something. We have to explain all this to clients at some point!

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