Transact has slashed charges on funds for wealthier clients in a wrap price war sparked by Abbey undercutting its rates for high-volume business.Baxter Fensham director John Baxter says Transact was losing clients in the £500,000 to £1m market to Abbey because the bank-owned wrap’s charges were sometimes thousands of pounds cheaper for wealthier clients. Baxter says he has worked with Transact on competitively pricing its products at the higher end. But Transact managing director Ian Taylor denies cutting client charges to compete with Abbey. He says that as a res- ult of steep growth in Transact’s business over the last six months – it now has £1.3bn under direction – several fund management firms have become more flexible with the rates they can offer his platform. Typically, discounts on charges are 50 per cent for high business volu- mes, he says. Taylor says: “Clearly, Abbey have priced against us at various levels but we are not trying to undercut them. We are not interested in what other people charge because we want to make money. “We have only one thing to do in our lives, which is to provide a better wrap than everyone else, and to continue to be around when everybody wants a wrap service. If Abbey feel that their pricing is sustainable, that is fine.” Abbey declined to comment on the move. Baxter says: “We think that Transact is the most comprehensive wrap on offer in the market but they were finding themselves selected against in the higher-net-worth market because Abbey were cheaper. “As a firm, I only want to use one wrap product. If Transact are cutting charges in half, that is a big reduction.”
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