In January, Money Marketing revealed that Transact is reducing its platform charges and taking steps to prepare the business for a full stockmarket listing.
From today the initial charge will reduce from 0.5 per cent to 0.2 per cent and the annual charge on cash holdings will be 0.45 per cent, down from 0.6 per cent.
Transact is also reducing charges per purchase transaction to 0.1 per cent for portfolios whose average value from January to March was more than £1m. That same charge will be removed for portfolios whose average value over the same period was more than £2m. Both reductions will be applied by way of rebate after the end of each month.
Transact managing director Ian Taylor says: “Most platforms are operating at a loss, even after having achieved quite substantial scale. Clearly, in the long term, that is not sustainable. We believe that the platform market is in a perilous position unless it does something to correct this suicidal pricing.
“However, there is a difference between profitable and sustainable and plain greedy. So we have always tried to adapt the mix of charges and discounts to maintain a balance between the needs of all our stakeholders – our customers, our shareholders and our employees.”