Skandia has called for clarity on how retail distribution review proposals will allow re-registration of assets.
Head of proposition marketing Peter Jordan says currently this is a no-cost activity because fund rebates and trail comm- ission cover the costs of the platform and adviser but the RDR is looking to ban both rebates and commission. He says: “It remains to be seen how, if at all, the re-registration market will continue after the RDR.”
He says one alternative to rebates is for fund firms to offer different share classes for each platform to reflect their commercial arrangements.
But he says: “With different share classes for each platform, automatic registration bec- omes impossible because funds will potentially have different charges on each platform.”
The RDR says that negative charges would breach its requirement for product and adv- iser charges to be distinct and Jordan says the FSA does not seem to have acknowledged that such pricing arrangements exist in the unbundled pricing structures of some platforms.
But Novia chief executive officer Bill Vasilieff argues that fund managers would not set up individual classes for every relationship they have with a platform. He says: “This should not be used as a red herring to delay the work Skandia already pro- mised to do to allow the free re-registration of assets.”
But Jordan adds: “Everybody wants a solution to re-registration and we are not going to use this as a means of putting it off but equally we know there is only value in re-registration business if we get to an automated solution.”