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Transact reduces charges

Transact is reducing the annual and transaction charges on its wrap.

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.”


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There are 6 comments at the moment, we would love to hear your opinion too.

  1. So this is the reality – too many platforms playing land grab by cutting costs whilst loss making pushing out the break even date – if it ever comes. And who takes the risk – advisers and their clients. Be very careful…

  2. Certain Individuals have clearly not read the article properly. Transact are passing on their PROFITS, to clients in the form of the reduction of prices. Nowhere does it suggest that Transact are attracting a loss by reducing prices.

  3. Sorry – I forgot – Transact are a charity and wanted to make everyone feel nice by passing on their profits to their customers.

    I think not.

    It’s a land grab – nothing else – and the losers from the market approach (not just Transact) will be advisers and clients when the failures start to emerge.

  4. Someone’s bitter aren’t they. Have you had your nose put out of joint?

    What a bad attitude to have, kindly direct your negativity elsewhere.

  5. Transact has steadily grown a highly regarded and profitable (spectacularly so, versus the competition..!) business and has not for the first time made alterations to its pricing model as the wrap/platform market has developed.
    As a client these costs they charge reflect the service they offer. The real crux is to have the right portfolio in the first place…There are a number of IFA’s charging their clients for loss making allocations / investments…who would rather pay..?

  6. Something I didn’t notice in this article until I spoke to Transact today- it is only the annual charge on cash holdings, and not on invested holdings, that has been reduced.

    In fact, more than that, it is only the annual charge on “switch cash”, money that had once been invested and is now held in cash, that has been reduced. The annual charge on “new cash”, money not yet invested since being put into the wrap, was already 0.45%.

    Hence, for a typical portfolio of which 95%-98% is held in investments (that being the entire point of course), this change makes virtually or actually no difference.

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