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Novia to cut cash rebates from April 2014 despite FCA clarification
by Alex Steger on Sep 12, 2013 at 08:33
Wrap platform Novia has announced plans to cut all rebates on new and legacy business from April 2014.
Novia’s announcement comes despite the Financial Conduct Authority (FCA) last week setting out a series of scenarios where cash rebates can continue on legacy business.
From October the platform plans to move all clients over to clean share class versions of funds, where they are available.
Where they are not available clients will remain in rebate-paying share classes, but from April 2014 the wrap will not take the rebate instead returning it to the fund manager.
If funds are held through a discretionary fund manager (DFM), the wrap will communicate with the DFM about the conversion.
There will no charge to advisers for the conversion or communications.
In April rival wrap Standard Life also vowed to cut rebates from its platform after April 2014.
Novia chief executive Bill Vasilieff (pictured) said the platform had consulted advisers about the move which would avoid creating 'a mess'.
'We took the view that clean share classes are the way ahead,' he said. 'All the advisers we’ve spoken to said rebates are dead, so we are going ahead. If you start doing some with rebates and some without, you enter an absolute mess.'
Vasilieff said it was the responsibility of fund managers to ensure their clean share class funds were not more expensive than the rebated versions.
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