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Barclays backs big networks to win in super clean world

by Jun Merrett on Dec 03, 2013 at 10:22

Barclays backs big networks to win in super clean world

Large networks such as Sesame, Intrinsic, Openwork and St James’s Place are set to win from fund managers move to super clean share classes, according to analysts at Barclays.

A report into the emergence of super clean share classes, written by Barclays research analyst Daniel Garrod, argued that larger networks will have the power to get access to super clean share classes, due to their size, and could afford to withstand some ‘revenue margin erosion to benefit from gains in market share'.

Barclays said the advent of super clean shares classes, the result of HM Revenue & Customs decision to tax rebates and the Financial Conduct Authority’s platform rules, had served to shift pricing power away from fund managers to platforms and large advice groups.

Despite tipping networks to win from super clean share classes, the report also said small local IFAs could be winners from the retail distribution review (RDR) arguing that high-net-worth clients would still be willing to pay for advice.

Barclays also backed execution-only giant Hargreaves Lansdown and adviser platforms Skandia, FundsNetwork, Cofunds and Standard Life to win in the RDR world.

The report picked out Cofunds parent Legal & General (L&G) for particular praise.

Barclays highlighted its acquisition of Cofunds in March as an important step, allowing it to compete with the likes of Old Mutual and Standard.

It also said it would benefit from an increased demand for passive funds in the RDR world.

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3 comments so far. Why not have your say?

North East IFA

Dec 03, 2013 at 10:54

vested interest alert - Barclays are managing the sale of Sesame

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Gordon Hay

Dec 03, 2013 at 11:13

So in the new transparent world of post RDR we have special terms for commitment to distribution ? Isn't that just the old tied agency model ?

IFAs do now have significantly more influence over the "value chain" (dreadful term) and insurance companies and fund managers are getting squeezed to the benefit of the client.

Equally, some of the "discount brokers" still use funds with large bid/offer spreads and high on-going fees rather than super clean (another dreadful term), no wonder Barclays tipped them for success / profit

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Steven Jones

Dec 03, 2013 at 19:35

Only in the murky world of financial services could the transparent post RDR landscape resemble that of the tied salesforces from the 1980s. Round and round we go. Clients come last while money is trousered!

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