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Skandia steps up supermart war with 5% commission

Skandia is raising the stakes in the IFA fund supermarket war by pledging to pay advisers up to 5 per cent commission until the end of the Isa season.

The deal offers advisers the chance to take 5 per cent initial commission on all online business through its Multifunds, MultiIsa and MultiPep range until the end of the tax year or up to 4.5 per cent for any paper-based business.

For IFAs that also want to take 0.5 per cent trail commission, the platform features front-end commission of up to 3.5 per cent for online business and 3 per cent for paper-based business.

Skandia already offers higher commission than other major supermarkets, after raising its rates last summer. However, its latest move is expected to tighten the squeeze on its three main competitors – FundsNetwork, Cofunds and Selestia. All the fund supermarkets are under pressure from slower sales volumes this Isa season.

Skandia also remains the only major platform to offer all the major fund providers. The only other IFA platform to compete on fund manager choice and commission is Transact.

Skandia head of investment sales Angus Duncan says: “There are some IFAs that prefer to be remunerated up front rather than ongoing so we are just trying to make it possible for more people to do business with us.”

Cofunds chief executive Clive Boothman says: “It is an interesting move. I think that people who are already using our platform will not be particularly swayed by it but it will be interesting to see how it is received.”

Fidelity marketing director David Cowdell says: “FundsNetwork is a price-neutral platform. It is our fund partners&#39 prerogative to set commission levels.”

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