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AXA Elevate shuns bulk conversion to clean share classes
by Daniel Grote on Sep 16, 2013 at 10:49
AXA Wealth platform Elevate has said it will not be following rival Novia in moving all clients across to clean share classes, arguing such a move 'would not always be in the best interests of consumers'.
Novia announced last week that it would cut all cash rebates on new and legacy business from 2014. Platform cash rebates on new business will be banned from April next year, but the Financial Conduct Authority (FCA) has backed down over earlier plans to ban cash rebates on legacy business.
Elevate managing director David Thompson said that funds featuring cash rebates could in some cases prove cheaper for investors and that 'putting control in the hands of advisers is the best way to address the issue'.
'There are still cost differences between retail and clean share classes which could result in an increased cost for clients,' he said. 'Some fund groups are also yet to launch a clean share class for certain funds.'
'Following the publication of the PS13/1 platform paper we did look closely and considered automatically converting assets on Elevate from retail to equivalent clean share classes,' he added.
'However, once the FCA clarified its position on the continuation of cash rebates it became clear it was not a regulatory requirement.
'The decision to force conversion appears at odds with the clarification from the regulator that the rebate to clients on legacy assets can continue and it is unclear where the authority for platforms to force this move comes from.'
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