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Skandia reveals unbundled platform details

Skandia has revealed the details of its unbundled charging structure, which will see the platform operate a tiered charging structure ranging from 0.5 to 0.15 per cent.

Assets worth up to £25,000 will be charged 0.5 per cent, assets of between £25,001 and £100,000 will be charged 0.35 per cent, between £100,001 and £500,000 will face charges of 0.3 per cent, £500,001 to £1m will be charged at 0.25 per cent and assets of more than £1m 0.15 per cent.

Skandia will not charge an account fee and the minimum charge on holdings will be £8.30 per month.

The provider says it is in the process of negotiating rebates with fund managers and will pass them on to investors as units.

It adds there will be no wrapper charge or charges for the platform tools, or transactional activities such as switching and rebalancing.

Skandia UK chief executive Peter Mann says: “I am pleased to announce a price structure that is simple, competitive and customer-focused. There is a lot of focus on price within the industry but for advisers and customers, I think sustainability and user experience are equally important. 

“We have priced our platform of the future at a point where we will be able to support advisers and customers for the long term, as well as continuing to lead the way in the development of the platform market.”

The structure will launch in December.

Cofunds revealed its unbundled charging structure last year. It is made up of a £40 annual charge and a sliding scale of annual management charges from 0.29 to 0.15 per cent.

Assets worth up to £100,000 will be charged 0.29 per cent, between £100,001 and £250,000 0.26 per cent, between £250,001 and £500,000 0.23 per cent, between £500,001 and £1m 0.2 per cent and assets of more than £1m will be charged 0.15 per cent.

Fidelity’s unbundled charging structure is made up of a flat rate charge of 0.25 per cent, alongside a £45 annual account fee.

The annual account fee is optional for investors until January but those who do not elect to pay it face switching charges.

The Lang Cat principal Mark Polson says the success of Skandia’s unbundled charging structure will depend on the size of rebates it is able to negotiate from fund managers.

Polson says: “Skandia will be using all of its power to try to get the best rebates around. I think the difference between Skandia’s pricing and the rest of the market will come down to the rebates it can get from fund managers.”

Polson adds that the fact Skandia does not have a wrapper charge puts it in a good position against some competitors that at first glance may seem better value.

Platform charges including pension wrapper charge

Source: The Lang Cat (Platform charges above including pension wrapper charge)

Polson says: “Skandia has been the only one of the big three to offer a proper multi-wrapper proposition. Skandia Investment Solutions has integrated wrappers, making it the most wrap-like of the big guys. This gives it an advantage over Fidelity and Cofunds.”

Murphy Financial associate partner Adrian Murphy says although Skandia’s charging model is similar to most of the market in terms of its structure, a flat fee would be fairer to clients.

He says: “Skandia’s charges seem fine on the face of it but I would like to see a change to the way most platforms charge.

“I do not think it is fair that customers have to pay a percentage of their investment even though the service is the same regardless of how much you invest.”


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