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Platforms kick off scramble for clean fund discounts
by Rachael Revesz on Apr 08, 2013 at 15:15
Platform giants Hargreaves Lansdown, Fidelity and Cofunds have announced plans to follow Skandia and Standard Life in demanding discounted clean share classes from fund managers.
Last week Standard Life and Skandia said they would move away from their unit rebate-based charging model and add clean share classes to their platforms following HM Revenue & Customs’ (HMRC) decision to tax rebates from 6 April.
Both platforms said they would negotiate ‘super clean’ share classes without a rebate, with their size and distribution power reflected in a lower annual management charge.
Seven Investment Management (7IM) said it too would ask for its own ‘super clean’ share classes; and AJ Bell said it believed it had the power to do so.
David Thompson, managing director of AXA Wealth's Elevate platform, said the provider would be looking to add discounted clean share class funds to the platform 'as and when fund managers make new enhanced clean share classes available'.
Wraps Nucleus, Novia and Ascentric said they wanted to see a level playing field, with every platform accessing the same clean share class eventually lowering to a price of around 0.4%, cheaper than the current 0.75% standard.
Hargreaves Lansdown chief executive Ian Gorham said the platform had not started negotiating with fund managers but expected new share classes to be issued by the end of the year.
‘We would seek to negotiate the better deal for our clients. That’s part of the whole reason we exist,’ he said. ‘It’s a whole new game, and a whole new market and price will affect everything.
‘We will wait for the platform paper to come out, then go through the process with the fund management industry and arrange whatever deal is available for new share classes, and then put them on the platform.’
Ed Dymott (pictured), head of business development at Fidelity Worldwide Investment, said the group would not demand exclusive ‘super clean’ share classes but would expect to get the same price as rivals such as Skandia and Cofunds.
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