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Zurich drops platform charges for large portfolios

Zurich is more than halving its platform charge for investors with large portfolios from 0.22 per cent to 0.1 per cent.

The 0.22 per cent charge is currently levied on investors with portfolios over £1m.

Zurich is also lowering the assets under administration threshold for its highest tier from £1m to £500,000. Currently investors with portfolios between £500,000 and £1m are charged 0.27 per cent.

The provider is also lowering charges for portfolios between £250,000 and £500,000 from 0.27 per cent to 0.25 per cent.

The pricing changes announced today by Zurich will be effective from 1 January 2018.

Old tiers (£) Old % New tiers (£) New %
0k-100k 0.35 0k-100k 0.35
100k-250k 0.30 100k-250k 0.30
250k-1m 0.27 250k-500k 0.25
1m+ 0.22 500k+ 0.10

Zurich retail platform strategy head Alistair Wilson says the platform is using its scale to be able to lower charges for investors.

Wilson says: “With annuities in decline, consumers are increasingly consolidating their defined contribution pots as they look for a single and more easily manageable income. This trend is likely to continue as more affluent baby boomers move into retirement.”

He says: “We are significantly lowering our platform fees for higher investments to ensure we are well-placed to meet this demand and drive greater value for consumers.

Wilson says the pricing changes will apply to new and existing customers and those who have accumulated assets through family linking will also have lower costs.

Platforum research associate Andrew Ashwood says Zurich’s attention is now on its adviser platform following the sale of its workplace platform to Scottish Widows earlier in the year.

Ashwood says: “This move shows intent to fuel growth on the intermediated side of the platform, after losing the workplace assets. Zurich has a strong retirement proposition and is focused on helping advisers to manage client income in decumulation.”

Platforum predicts more platforms will reduce their pricing to convert mid-value clients into high-value clients in 2018.

Ashwood says: “This is another move from an adviser platform to shave off basis points for larger portfolios in a bid to capture a greater share of assets from primary users and to move secondary and tertiary users up the value chain. With charges coming down for all portfolios over £250k and more significantly so for those over £500k, there will be interest from clients to consolidate assets.”

Several platforms have announced changes to their charges and pricing models this year. Earlier this month Transact reduced its annual charges and aligned them with the cash rates it applies.

In February, Ascentric moved to an all-in fee structure.


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