View more on these topics

Skandia sticks to its guns over wrap disclosure, despite Mifid

Following Fidelity FundsNetwork’s decision to reveal details of the fees it receives from fund management groups, there has been a predictable call for those who are not already doing so to follow suit.

Cofunds says it is developing an unbundled pricing model, the details of which are set to be announced this month, although it has not specified whether it will publish all the fund manager payments it currently receives.

Skandia says it cannot reveal the figures because of contractual agreements it has entered into with fund managers.

I managed to get hold of a copy of details of Skandia’s income from fund managers from 2009, which the firm says is now “significantly” out of date.

The list makes interesting reading, with most popular funds offering a payment of between 0.8 and 0.9 per cent, including adviser trail, so between 0.3 and 0.4 per cent was being kept if you take away an average trail of 0.5 per cent.

In comparison to Fidelity’s fund manager fees, this is higher than the 0.25 per cent fee taken from the majority of funds on FundsNetwork.

Skandia’s argument is that as long as the customer knows the overall price they are paying, and sharing in the rebates that it has negotiated from the fund groups, do they need to know every payment? “We believe we get best rates. Ultimately that will make us cheapest wrap for fund price, best customer outcome,” tweeted Skandia head of proposition Graham Bentley in defence of non-disclosure earlier this week.

Some might say it is a useful excuse for Skandia to say that fund manager agreements prevent it from “broadcasting commercially sensitive information such as their rebate arrangements”. But is Skandia breaching requirements set out in the European Mifid directive?

Under Mifid, a platform is required to reveal the fund manager fees if they are asked but having asked Skandia directly, I was told that only clients or their advisers were able to request this information.

It was surprising, then, to learn a number of IFAs who had requested this information had also been refused access to the fund manager fees Skandia receives.

After putting this to Skandia, I was then given the following statement: “Under Mifid requirements we only have an obligation to disclose fund manager rebate data to our clients. If however, an adviser is acting on behalf of a client when enquiring about the data and is able to demonstrate this, then it is common practice for us to send them the data.”

However, if an adviser is asking on behalf of a potential client, as some advisers have done since the Fidelity announcement, Skandia says it has discretion about whether or not to give out this information. 

Skandia adds that only five clients have asked for the rebate material over the last 12 months and they have all received the information.

It appears that Skandia is making it as difficult as possible to obtain the information which you may well say it is entitled to as it looks to guard its commercial arrangements.

In another tweet, Bentley says: “Post RDR all rebates go to client; I don’t intend to lose advantage rebate terms will provide for customers.”

Skandia sounds like it is sticking to its guns and will not be following FundsNetwork in disclosing its fees. Time, and future business levels, will tell whether advisers and their clients agree with this stance.

Sam MacDonald is the wrap and distribution reporter at Money Marketing- follow him on twitter here


News and expert analysis straight to your inbox

Sign up


There are 6 comments at the moment, we would love to hear your opinion too.

  1. Funny how compamies like Skandia are so PRO RDR – THAT IS UNTIL IT COMES TO THEMSELVES DISCLOSING COMMISSION / FEES – then all of a sudden – it’s not quite so good!

    Is this a case of double standards & not a case of hypocrisy of the highest order! OR MORE A CASE DON’T DO AS I DO – JUST DO AS I SAY! WHAT A B***** CHEEK!

  2. The information will come out in due course but if we all want to know it sooner, how many adviser requests, working on behalf of clients, would it take for them to just publish the info. How many equiries a day can they handle ?

    Personally i’m mildly curious at the answer but if they can get better deals for themsleves than Fidelity, Cofunds or a Wrap provider then good luck to them. As people have said before, in any other industy all your told about is the final price.

  3. I agree with Ritchie. If Skandia have a pricing advantage over their competitors then good luck to them. The client simply needs to know the overall cost of an investment/product and how this affects their investment return and is probably less interested in the complexities of who gets what.

  4. The pricing advantage shouldn’t disappear if disclosed. The more these things are kept covered up the more people believe that there is a reason for not disclosing.

    kind of interesting to see Skandia and Hargreaves in the same stable

  5. Which specific part of Mifid? Hargreaves Lansdown declined to tell me, as one of their customers, the numbers for the funds I hold when I asked them, providing only numbers combined over several years that effectively hid the values. It seems that I need to quote chapter and verse to get them to do it.

  6. To answer my own question with the help of the FSA Consumer Helpline:

    COBS 6.4.3 requires it and can be found at

    If the firm still refuses to disclose, I should make a formal complaint. If that doesn’t work, I should complain to the Financial Ombudsman Service.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm