Well done to Fidelity for revealing the fund manager rebates it receives on its FundsNetwork platform. It's a significant moment in the short history of platforms, and has helped to introduce some long-needed transparency in the non-wrap end of the market.
Now Fidelity has made the first move, rival fund supermarkets Skandia and Cofunds must follow. Neither have imminent plans to follow suit, but surely they cannot afford to maintain the old smoke-and-mirrors approach to pricing while FundsNetwork holds itself out as a beacon of transparency.
Whatever they decide to do, they know they need to disclose rebates by 31 December 2012. What will be interesting to see in both cases is how much rebate they are receiving compared to FundsNetwork.
The figures Fidelity has disclosed are pretty unexciting: on average they receive 24.9 basis points (bps), with only a very small percentage of funds paying the platform 50 bps.
So what have Skandia and Cofunds got to hide? Bigger rebates would be the obvious answer. It's likely that Skandia tops the tree in terms of the cut of fund manager payments it receives, as became clear when Brett Williams jumped ship to join Cofunds.
Arriving at the business, Williams pushed for a larger slice of fund manager charges, in a move that was understood to be motivated by the chunk he knew his former employers Skandia were getting. It's thought that move led him into conflict with fund manager shareholders, before he left the platform last year, so it's unclear how successful he was.
Skandia said at the time it received up to 90 bps on some funds. That's a whopping number, but until Skandia decides to join FundsNetwork in publishing their cut, we won't know how widespread that is across all the funds on the platform.
It's time for both them and Cofunds to 'fess up. Advisers need to know.