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Transact cuts investment charges as 2018 float looms

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Transact cuts investment charges as 2018 float looms

Transact has revamped its charges for 2018, with cuts in investment charges aimed at boosting the platform's assets beyond £29 billion in a year in which the company has previously said it intends to float. 

The platform business has long eyed an initial public offering at some point next year, and ahead of this has announced a new charging structure for clients. 

Under the system due to come into place in April next year,  investment and cash accounts will now be charged at the same rate.

This change will slightly increase some charges for cash holdings, but Transact said it will calculate rates under both the current and new rates and will charge clients the lower of the two. 

Alongside this move, Transact has lowered the portfolio size required to access discounted charges from £120,000 to £100,000. The change means clients with between £100,000 and £600,000 will be charged 0.29% on their entire portfolio. Currently those with less than £120,000 must pay 0.5% on the first £60,000 for investment accounts, and 0.45% for cash accounts.

Transact has also launched a new 0.05% rate for holdings above £5 million. 

Jonathan Gunby (pictured), chief development officer at Transact, said the platform chose to use the fact it now has nearly £29 billion of assets under administration to lower charges for clients. 

'Successive price cuts have had a positive impact on our net flows and profitability while providing benefits to both advisers and their clients. Our funds under direction are now around £29 billion and we are again passing on savings derived from our scale and specialisation in the platform market,' he said.

Transact charges on a tiered basis, so clients are charged one amount for the first part of their portfolio, and then a lower amount on the rest once they pass a threshold. The new charging structure for clients with £100,000 or less will see the following tiers of charging:

  • First £60,000 - 0.5%
  • £60,000 - £100,000 - 0.29%

For those with more than £100,000 charges will be:

  • First £600,000 - 0.29%
  • £600,000 - £1.2 million - 0.19%
  • £1.2 million - £5 million - 0.07%
  • Anything above £5 million - 0.05%

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