Other Citywire websites
Stay connected:

View the article online at http://citywire.co.uk/new-model-adviser/article/a637632

AXA Elevate unveils revamped charging structure

by Jun Merrett on Nov 27, 2012 at 13:18

AXA Elevate unveils revamped charging structure

AXA Wealth has unveiled its new four-tiered pricing structure for its Elevate platform which will be available from 1 January 2013.

For portfolios under £25,000, AXA Wealth will charge 40 basis points (bps). Portfolios between £25,000 and £100,000 will be charged at 34 bps.

Clients with assets of £100,000 and £500,000 will be charged 32 bps with portfolios of over £500,000 charged 28 bps.

The pricing is tiered so the client is charged the lowest price for their whole investment, for example a client investing £100,000 will play a charge of 32 bps for their entire investment.

Earlier this week New Model Adviser® revealed that AXA Wealth planned to slash the prices for  Elevate platform by half.

David Thompson (pictured), AXA Wealth's managing director of marketing and distribution, said the new pricing structure would help the platform towards sustained profitability.

‘We believe our new simple and competitive pricing structure will put us ahead of the game in building assets on Elevate. We are already one of the fastest growing platforms in the UK market today and our new pricing model has been designed to accelerate asset growth and deliver sustainable profits in line with AXA Wealth’s long-term ambition to be a UK platform winner.’

Click here for our definitive database on wraps.

11 comments so far. Why not have your say?

Paul Riddell

Nov 27, 2012 at 13:48

The new model is built on making the new pricing as clean and simple as possible, in response to requests from advisers, many of whom already benefitted from an individual pricing deal that suits them and their business. But it was a little confusing. AXA Wealth 's published pricing was already long out of date with the reality of what we were actually charging.

report this

New Modal Bob

Nov 27, 2012 at 21:44

So the lowest anyone will pay is 28bps. Seems like some of the client bases of some of the VHNW advisers you purchased will end up paying a heap compared to what they could be.

No sure how anyone can use simplicity to justify charging someone several bps difference on their entire valuation for those clients on either side of the tiers.

So a client who deposits $500,000 and then loses $1000 due to market movement, fees etc ends up paying more money then they would have before their investment went down. Have fund explaining that to clients.

report this

Paul Riddell

Nov 27, 2012 at 22:15

No, that's not the case. It drops much lower than that for cases above £1mn so contact me for more details. I can also send you an info pack, with all the lowdown on the new pricing model. As Mark Polson has said, AXA Wealth "has been radical here" , so do get in touch.

report this

Paul Riddell

Nov 27, 2012 at 22:26

Here's The Platforum review http://www.theplatforum.com/axa-pricing.

report this

Paul Riddell

Nov 27, 2012 at 23:11

...And this is Mark Polson's review - http://langcatfinancial.co.uk/2012/11/bam-biff-pow-take-that-haters-axa-elevate-slashes-its-charges/

report this

New Modal Bob

Nov 28, 2012 at 04:24

So the quoted rate of 'with portfolios of over £500,000 charged 28 bps' is completely incorrect.

You kindly provided a link to Mark Paulson's review. In it I quote 'in AXA’s stepped structure £100,000 is a precipice point, so my figures show their lower charge. If I did £99,999 the whole portfolio would be charged at a higher tranche point. C’est la vie, but it’s something advisers should be aware of.'

If we look at another precipice point of $500,000. A client with 499,999 would be charged 32bps or c. $1,600pa; where as a client with $500,001 woudl be charged 28bps and be charged $1,400pa.

The facts are it is a flawed system and why nobody else in the industry uses it, it just doesn't add up.

report this

Paul Riddell

Nov 28, 2012 at 06:33

We calculate daily so customers hovering around this point will in effect see an average between the two rates.

report this

Bindair Dundat

Nov 28, 2012 at 08:33

Here we go again – guess what happens next…..?

NMA article reads “AXA cuts jobs as margins are squeezed”

When will folk smell the coffee and realise that a few basis points here and there in a total TER of say 200bps (75bp to adviser 35bp to platform and 90bp for fund say) should make next to no difference at all – Value to client should be the driver. What AXA has done is simply play for share via the naïve members of a community that have for years relied on price to shift product. Given that Elevate is a darned good solution then I am struggling to see sense in this strategy

The FSA will see this as good for consumers in that costs are being driven down even further. The danger is that we end up with “anorexia industrialis” where all parts of the value chain become so lean and fit they emaciate and die which leaves further sectors of the public under served again

report this

Paul Riddell

Nov 28, 2012 at 08:49

This has no impact on profitability etc. as suggested. The model is built on making the new pricing as clean and simple as possible, in response to requests from advisers, many of whom already benefit from an individual pricing deal that suits them and their business. Therefore our published pricing was already long out of date with the reality of what we were actually charging. I can send you a pack if you'd like the details.

report this

effessay

Nov 30, 2012 at 09:53

"This has no impact on profitability"

That's because you aren't making a profit.

report this

EVHE

Nov 30, 2012 at 13:50

A platform drops the price charged to a client and still the community criticise! Assuming the organisation concerned are able to drop the charge and increase funds under management then I'm sure they will be delighted with the outcome as will the end consumer.

It seems to me that such negative comments often get generated by competitors that can only criticise. The more interesting debate may be to ask how they are going to keep their market share let alone increase it ?

Anyone that understands the platform/wrap/supermarket space will realise that making a profit in the very early years is not practical in light of the huge outlay on systems development.

I for one welcome any price reduction that can be passed on to clients.

Price is just a small part of the jigsaw surrounding choosing a platform but nevertheless an important piece.

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

Read more...

FCA bans two advisers over unsuitable Sipp advice

by Michelle Abrego on Apr 17, 2014 at 10:24

Sorry, this link is not
quite ready yet