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Standard lays out charging structure

Standard Life has unveiled its adviser-charging structure and will unbundle its core retail product range as part of RDR pricing changes.

The firm will announce explicit charging structures in the summer for its active money Sipp, retail portfolio bond and funds available through the FundZone platform.

Where the FundZone platform is used, fund manager rebates will be paid back to the client via their cash account, as is currently the case with the Standard Life wrap. Standard will then introduce an explicit wrapper charge to cover its cost.

Standard says it is not making any changes to its wrap charging structure until the FSA clarifies its position on payments between fund managers and platforms and cash rebates.

It operates what it calls a “semi-unbundled” structure on its wrap, which lists the annual management charge and the adviser charge, but deducts the wrapper charge from the fund manager rebate before passing it to the client’s cash account.

Standard will facilitate adviser-charging from both the wrap cash account and the Sipp cash account.

The wrap will facilitate initial adviser-charging as either a percentage of investment or flat fee and ongoing adviser charging as either a fee or percentage of assets under management or on an ad-hoc basis as a flat fee. A regular initial fee can also be taken on Sipp investments on the wrap.

Standard has clarified that on its retail portfolio bond, any adviser charging deductions will form part of the 5 per cent withdrawals. On annuities, the adviser charge will be not be taken from the tax-free cash. Advisers can choose to be paid monthly, quarterly, half-yearly or yearly.

Standard says advisers will be able to start writing business on an adviser charging basis from the fourth quarter.

Jacksons Wealth Management managing director Pete Matthew says: “It seems odd that Standard is waiting for the regulator in respect of its wrap. Surely total unbundling and total transparency is what everyone wants.”

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