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Standard Life reveals 6 fund groups with lower charges on its wrap

Standard Life has agreed contractual terms on preferential share classes with six fund groups.

Henderson, Investec Asset Management, Neptune, Schroders (including Cazenove funds), Standard Life Investments and Threadneedle Investments have all agreed discounted terms for advisers using the wrap. 

Standard says that preferential terms with four further groups are close to being announced.

Some of the fund groups have offered entirely new share classes, while others have given the platform access to their institutional share classes. According to Standard, the average discount will stand at 9bps, although it declined to disclose the discount levels offered by specific fund groups.

Standard moved to praise those asset managers that had agreed price discounts and head of investment group relations Graham Dow described the announcement as a ‘ground breaking shift in fund pricing’.

He says: “We should applaud the move that these seven groups have taken. This is a ground-breaking shift in fund pricing. The engagement and support we have had from all the fund groups acknowledges their clear intent to continue doing business with us on similar preferential terms to those that our customers currently enjoy.”

The platform acknowledged that some of the fund groups were also in negotiations with other platforms, but David Tiller says he believes competitors will not be able to beat his firm’s pricing levels. He says: “I have no doubt that other platforms will want the same deal. It’s unlikely that others will get a share price more cheaply than us.”

In a briefing yesterday, Standard claimed that in all instances where it had approached fund groups to discuss discount pricing, none have dismissed the possibility of a price negotiation. However, it explained that some ongoing negotiations could not be made public yet and confirmed that some fund groups had declined to begin full negotiations at this stage.

Standard plans to bulk-shift all of its business into clean share classes at the end of this year. Rival platforms last week told Money Marketing that they had no plans to do the same, with Skandia, Cofunds and Fidelity all confirming that they would continue to pay trail commission on legacy business until April 2016.

Standard Life head of adviser platforms David Tiller accused some of Standard’s rivals of burdening advisers with the task of individually switching clients to adviser charging and unbundled share classes. He says the bulk switch from Standard will relieve advisers of making the switch themselves ahead of the FCA deadline.

He says: “By doing the conversion we send out a letter and the adviser sends a letter to the customer and it’s done. The ones (platforms) that aren’t doing that don’t have the operational capacity to do the conversion themselves.” 

Standard adds that 80 per cent of its advisers are already moved to adviser charging and that it only expects to switch off trail for a very limited number of advisers when it performs the bulk-switch.

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