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Skandia boss blasts rivals' 'suicidal pricing'

by Jun Merrett on Jan 23, 2013 at 11:34

Skandia boss blasts rivals' 'suicidal pricing'

Skandia boss Peter Mann has hit out at the 'suicidal pricing' of rival platform providers which he branded unsustainable.

Mann, who is UK managing director of Old Mutual Wealth, would not be drawn on which platforms he was criticising and said Skandia did not need to drop prices as it had scale which competitors lacked.

In November 2012 AXA Elevate unveiled a new charging structure cutting prices by almost half for assets under £100,000.

Skandia's rival platforms Cofunds and Fidelity revealed their unbundled charging structures at the start of 2012, both undercutting Skandia. Fidelity unveiled a flat rate charge of 0.25% with Cofunds announcing a tiered structure with an average charge also of around 0.25%.

'There is currently some suicidal pricing taking place in the market which is out of necessity rather than desire. Nobody wishes to price their product suicidally and no-one can sustain suicidal pricing for any period of time,’ said Mann.

‘The reality is this is a scale game. We have scale so we don't need the suicidal price. In order to gain the scale, some people will suicidally price, my view is it is an irrational and unlikely to succeed approach.’

Mann said IFAs should look out for platform providers altering their prices once they had achieved a certain level of assets.

‘The three most important things for an IFA are scalability, sustainability and functionality. If I was an IFA the last thing I'd want to do is pick a platform because it appeared financial attractive on day one, then on day 900 I had to change my platform from A to B. That is not economically efficient. In any market that sort of thing persists for a relatively short period of time, they get scale then they're going to adjust their pricing.'

Mann said Old Mutual Wealth was more than just a platform operator in the way Skandia has been.

'A platform is a vehicle and enabler. We want to move away from being more than just a platform. It's quite difficult to differentiate yourself as a platform or wrap,’ he said.

'If we create innovative fund solutions like the forthcoming Select range, that's much more something that is a noble cause to be known for because it differentiates you.’

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67 comments so far. Why not have your say?

alan mcintosh

Jan 23, 2013 at 11:48

Two wrap providers in 10 years?

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Jan 23, 2013 at 11:50

With all Skandia Investment Solutions scale they are still unable to run a platform that makes a profit. They should be proud of the fact that they are consistently able to run at a loss and still remain in business.

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Harriet Marlow

Jan 23, 2013 at 11:52

I recently sat the J11 Wraps and Platforms exam and must have parrotted off "Price alone is not an acceptable justification for Platform choice" about twenty times in all. I passed, so I can't have done too terribly but the whole syllabus contradicted itself contantly on the issue of pricing, very confusing. Glad I only had to deal with it in a hypothetical setting this time around.

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Jan 23, 2013 at 11:58

Skandia are only moving into profit as they have stripped back all support to IFAs. Their service towards IFAs is now appalling, they obviously believe that a platform is all they need, they are wrong, people still deal with people. Skandia are in danger of forgetting this. Skandia do not care about their IFA customers, only their bottom line.

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Ian T Coley

Jan 23, 2013 at 12:02

Interesting point of view

On the one hand setting charges unsustainably low to try and attract funds to achieve critical mas is one rather desperate way of approaching things.

On the other hand, how would one achieve the critical mass by adopting the view that a higher charge potentially non competitive route was the way to go.

On the third hand, this also smacks of someone trying to justify charging more than others, including competitors that do have the scale he claims for Skandia.

This also hints at some des[eration and I suspect we wil see some large scale migration from higher charge and (in my experience) not as efficient) Skandia to competitors.

Ian Coley

Medical Investment Services

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Graham Richardson, Consideredadvice.com

Jan 23, 2013 at 12:04

Skandia Investors need to be aware that to move to their new charging structure requires a minimum of £100pa, so this wouldn't make great sense to hold say just one years ISA money on their platform, without other products (such as a large pension fund) also on the same platform to reduce the "overall" costs.

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Will Watling (Capita Financial Software)

Jan 23, 2013 at 12:06

Advisers need to remember that if charges are higher than necessary for the same funds, tax benefits & overall solution on platform A vs B, then IF their adviser charges are based in any way on x% of FUM, then it's their ACs that will be reduced. This can easily be 20-30% diff. When clients & advisers are under commercial pressures, not doing analysis that could increase an advisers income, doesn't sound logical, let alone the potential for client detriment claims.

Back in the LAUTRO days, it's like offering an IFA 100% LAUTRO for a projected return of £1m vs 130% LAUTRO for £1.2m, yet the adviser chooses the 100% option even they & the client will be worse off!

All of the platforms & providers are signing off their new charging structures on Comparator & we see significant swings in the market that could save a client £100ks - surely an adviser would want to know this?

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Alexander Shaw

Jan 23, 2013 at 12:06

We have habitually used SIS as our platform of choice and have a significant amount of assets on there. We are a bit school in our office and believe people still deal with people. Since our Skandia consultant was relieved of his duties in December the lack of communication regarding his exit, replacement and our ongoing service has been appalling. So if they're not cheap and don't give us the assistance we need, why exactly should we stay with SIS / OMW? I wouldn't be sure cock-sure of your own lofty perch at the top of the platform tree Mr Mann...

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Ian Lees

Jan 23, 2013 at 12:08

It is interesting to see Peter Mann 's comments on " suicidal pricing ", from Skandia - who provide no service what could be described as " suicidal service ", by this I mean None ! No service, No support . . . No sign of anybody from Skandia . . . . which has resulted in No business . Perhaps these swedes are in hibernation - or at the boat show - ffrozen in. When skandia bug gered about with my pension, Mr Mann refused to deal with these matters for years ! Good job a. n. other company was willing to take new business and new pension contributions, and develop new business - rather than like Mr Mann sticking his head in the sand. My past experience - of Mr Mann - after his move to Bank Hall ( where I was a member for many years - when it was well run ) - and the removal of service - saw many members resign and find an alternative service provider. Seems like, poor delivery of service, and destruction of service , and the desttruction of service . . . . . . . . . . . follows Mr Mann around . . .now that is suicidal !

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James Clancy

Jan 23, 2013 at 12:14


Last April at the IFP North East branch one of our speakers made comments.

He stated. Because of the low returns received on investments Investors will not pay any more than 1.5% total.

That would be broken down as follows approximately

0 .75% would be paid to the adviser, as the investor saw value in that relationship.

Fund management would have to restrict their charges to 0 .5% and the

Wrap platforms would have the balance(0.25%) The reason behind his comments on wrap platforms is that the iNVESTOR WOULD NOT SEE THE VALUE IN THE ADMINSTRATION SERVICE provided by wrap providers.

Yes you can protect your margins and your proposition.

Rest assured, advisers will be doing the same and they are the gateway to the fund management and wrap platform propositions.

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Mad Eyes

Jan 23, 2013 at 12:20

its rarely best in life to pick the cheapest product. Why is this even an article? Just stick to your knitting and let some of these budget basements wraps get on with it and possibly fail. Its not your concern.

I believe we have the pick the best wrap. For us and clients and enables us ultimately to keep unecessary fees down for clients ie such as sorting out admin errors with some of the providers, which can be very time consuming and costly

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John Phillips

Jan 23, 2013 at 12:22

Scale “the extent or relative size of something”. You would think that being a company with “scale” they would be best situated to cut prices and therefore his claim of being a company of scale seems contradictory to me. If they are higher in cost, for a client to access a fund, how can an IFA justify using the more expensive contract when there is no discernible increase in service or quality of the platform?

We are all looking to justify the total cost of advice and transactional undertakings. If your offing is a 1% annual charge on AUM then, if you can demonstrate to your client that you are accessing the chosen funds in the most cost effective way, you have more chance of being a valued service provider.

Just take a look at the difference between the growth of a Life Assurance branded fund as opposed to direct investment in the fund via a platform, 3%-4% over a 12 month period in a bull market! Add a few more years and you can see 10%-20% less growth, so in my humble opinion if I can shave 10-25 bps on a clients AMC I will look to do so as often as necessary.

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Simon P via mobile

Jan 23, 2013 at 12:26

Philip Edward is spot on. Skandia have scale already and are more expensive than many rivals but still can't make money. Their net inflows are negative so their problem will get worse and losses will increase. Give it 12 months beyond electronic re-reg and there will be a stampede off skandia. Once that starts skandia won't be able to reverse it. They can't afford to slash prices for customers or increase costs (to improve service). They are betting everything on the fact they do unit rebates but this is madness as either most clients will just move to clean funds (esp given the recent hmrc articles) or their rivals will build unit rebating capability (none of them want to but rest assured they will if the market requires it). I genuinely don't see a future for the skandia platform.

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Scotty McJock

Jan 23, 2013 at 12:48

Last 2 paras of the article maybe give the clue as to future direction. In other words "vertical integration".

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Simon West

Jan 23, 2013 at 13:01

Skandia are just going to have to deal with the fact that the market is working.

IFAs are selecting platforms on cost, because the market is transparent and the cost of a platform is now obvious. Skandia want unit rebate confusion to hide their charges.

In my opinion Skandia are a historic platform on their way to extinction, no wonder they're rebranding.

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Ian Lees

Jan 23, 2013 at 13:19

@James Clancy - What a great description " advisers are thegateway to fund management ". The costs allow profits on top of costs - anything less is commercial business suicide. If they don't want to pay - let them go away !

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Bob Donaldson

Jan 23, 2013 at 14:48

It will be an interesting day when the first WRAP platform goes pop. I will bet the FSA then start looking very closely at their financial viability. Can you imagine the mess that will be left and the damage done to clients.

Whilst I would not wish such on clients, their are too many players in the wrap space all competing for the same business.

As the wealth on these platforms is spent by retirees over the next few years, it will not be replaced by the wealth of the coming generations as they don't have any and few of us are doing anything about getting them saving for the future. Very few will have lump sums from pensions of any size as the final salary schemes have had their days in the sun. Watch the contraction then and prices starting to rise.

We live in interesting times!

Perhaps I should say next put these wrap platforms in order starting with the one that will disappear first:

Skandia Investment Solutions.







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Jan 23, 2013 at 14:50

Some platforms run at a loss because they are "subsidised" by enticing the adviser using them to buy the provider's in house funds. A profitable adviser for the likes of Skandia is one that uses the platform and uses Spectrum or Skandia funds, similarly Standard Life Wrap and Myfolio, SLI funds and Standard Life Wealth. You can work out which model Skandia are heading towards.

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The ssinnic

Jan 23, 2013 at 15:56

@Bob D

You're so right and are a better prophet than Isiaah!

When I was in bus. Skandia was an insurance company with no funds of their own worth looking at so they had the crazy notion that they would "import" other co's funds and rebrand them. It's a failed busniess model and it's unravelling by the day. Sorry. It's Transact or nothing!

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Common OEIC

Jan 23, 2013 at 17:33

I would like to see how Mr Mann believes an IFA should document the decision to go with a more expensive option of platform, based on a view that competitors might have viability issues at an unspecified point in the future.

The cost of their service is a known quantity and as such can be measured and documented. Mr Mann would have that off set by some crystal ball gazing that cannot be documented or measured. But then again, it wouldnt be his problem if the regulator had an issue with the IFAs advice, now would it?

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Simon Mansell

Jan 23, 2013 at 17:33

It is unwise to pay too much, but it is unwise to pay too little. When you pay too much you lose a little money. That is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.

John Ruskin 1819 1900

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Simon Mansell

Jan 23, 2013 at 17:38

Are you driving home in a BMW, Merc or Audi or pehaps a Nissan?Remember it was Skandia that refused Arch Cru admission to its platform - now that was worth a bob or two!

Financial Adviser Service Awards 2012 – November 2012

Investments Provider

Skandia – 5 stars

Life and Pensions Provider

Skandia – 5 stars

The Aberdeen UK Platform Awards – September 2012

Best fund platform

Skandia – Winner

Leading platform-based planning tool provider

Skandia – Highly commended

Investment Adviser Platform Awards – September 2012

Platform of the Year - Skandia – Winner

Best Platform Technical Support - Skandia – Winner

Best Platform Adviser Service - Skandia – Winner

Most Diverse Product Range - Skandia – Winner

Moneywise Pension Awards – September 2012

Best Personal Pension Provider - Skandia – Winner

FTAdviser.com Online Service Awards – June 2012

Company of the Year - Skandia – Winner

Life and Pensions Provider Skandia – 5 stars

Investments Provider Skandia – 5 stars

Investment Life & Pensions Moneyfacts Awards 2012

Best Wrap/Platform

Skandia – Winner

Best Online Service

Skandia – Highly Commended

Best Equity ISA Provider

Skandia – Commended

Moneywise Pension Awards – September 2012

Best Personal Pension Provider - Skandia – Winner

Money Marketing Financial Service Awards – March 2012

Best WRAP or Platform - Skandia – Winner

Professional Adviser - International Fund and Product Awards 2012

At the 2012 Professional Adviser - International Fund and Product Awards, Skandia claimed the following:

Best International Life group

Best Service Initiative

Best International Life Product

International Adviser Awards 2012

At the 2012 International Adviser awards, Skandia won 24 awards across all four regions. As these are too numerous to list, we have only listed the UK Offshore Awards:

Best single premium investment product - Skandia International Collective Bond

Best trust/estate planning product - Skandia International Loan Trust Proposition

Best overall product range - Skandia International

Best online proposition - Skandia International

Best single premium investment product - Skandia International - Collective Bond

Best trust/estate planning product - Skandia International - Loan Trust Proposition

Best overall product range - Skandia International

Best online proposition - Skandia International

Money Marketing Financial Service Awards – March 2012

Best WRAP or Platform

Skandia – Winner

Professional Adviser Awards – February 2012

Best Wrap/Platform

Skandia – Winner

Best Outsourced Investment Solution for Advisers (for our Spectrum funds)

Skandia – Winner

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Usually found sitting on the fence

Jan 23, 2013 at 18:05

@ Simon Mansell - Your John Ruskin quote all well and good, but what if you pay too much and still end up losing everything as the expensive thing you bought was not capable?

Or in other words, you pay more believing you are buying quality and longevity, when in fact everyone else buys VHS which is a lesser quality and cheaper, but which one succeeded?

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Simon Mansell

Jan 23, 2013 at 19:04

@Usually found sitting on the fence

I was of course addressing the argument that suggested cost is the deciding factor, which of course it is not and of course, at times you can pay more for less. My due diligence promotes Skandia. I note its parent Old Mutual is ranked on the 2011 Fortune Global 500 at 246, a list of the world's largest companies and is is also FTSE100 listed with more than 12 million customers worldwide. That's one third of the UK working population ( 38 million). Therefore, in scale it has funding beyond its rivals.

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Simon P via mobile

Jan 23, 2013 at 19:06

The likes of Axa have , presumably, looked at what levels of FUM they think they can achieve and lowered prices accordingly knowing where their profitability level is and accepting a loss up to the point in time they achieve that. Risky strategy if they dont increase fum quickly enough but shows they are confident of being one of the platform winners. Skandia are in a terrible position because they already have huge amount of FUM but can't make a profit even with their higher charges. Axa may fail but they have at least got this option. These comments from peter mann just smack of desperation as they realise they cant compete. Will be interesting to see where this ends up. My money on winners are transact, standard, Axa and nucleus. Losers skandia, Zurich, aviva and fidelity. Just my view. As people have pointed out whether a platform is expensive or cheap does not give any indication how good it is. Cost is one of many factors to take into account.

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Sam Matthews

Jan 23, 2013 at 20:15

Simon Mansell - AXA, Zurich, Aviva and Aegon are all bigger than old mutual. So Skandia has funding beyond 'some' of its rivals. Also many of its rivals who have less funding already make a good profit - Transact, Nucleus, Novia etc. So they cant compete with the big boys in terms of funding and cant compete with the 'smaller' players in terms of profitability.

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Jan 23, 2013 at 21:00

This is from the business that is up for sale, is not fully RDR friendly yet and though the toys/tools on site are good, the platform is not a true fully paperless online system.

@Simon Mansell, you are probably aware that , with so many users of SIS they are bound to get a good many of the votes for the accolades you list, they really are ego inflatersnothing more.

I worry that when Skandia is sold there will be a mad scrabble by clients and advisers to move, and I think HL may well be in the frame to pick up much of the investments of those orphan clients of Advisers that have left the industry.Frying pan into fire .

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Jan 23, 2013 at 21:33

In the big scheme of things, it is not all about cost but about the whole proposition and no single platform has it all. End of story!

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The ssinnic

Jan 23, 2013 at 21:46

Not yet, Johnnie! But don't open an account with Ladbrokes!

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Bert Poppins via mobile

Jan 23, 2013 at 22:04

There is no doubt that Old Mutual is a deep pocketed parent but does that naturally mean it will fund a loss making subsidiary. Indeed would it not be best placed to drive the price artificially down and clear out some rivals.

Scale, as Mr Mann use it, does not normally lead to uncompetitive prices. Is it more like 'we've got loads of existing assets that we make a tidy margin on, advisers are lazy lot so won't budge, and even if they did I could lose 50% of my assets and I'd still be better off than if I cut my margin by 20bps across the book'.

Classic corporate animal Mr Mann. See the tenure through and move on.

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Jan 24, 2013 at 01:07

Peter's article focuses on the price issue which is ironic bearing in mind Skandia were promoting their in house charge calculator price watch for a great deal of time until they regularly were found out.

I agree that functionality in choice is of great importance assuming that's the case where are the improvements mentioned in New Model Adviser in January 2010 ? The Pete Mann article promised cash accounts, ETF etc....3 years on ?

Finally scale is important but how long will that last in light of the outflows that have happened and are likely to happen as the market requires a more competitive price, greater fund choice and improved functionality.

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Julian Stevens

Jan 24, 2013 at 09:27

Any fund switch within an existing Unit Trust account automatically (now) switches off trail. So, as part of our current round of portfolio reviews, we're explaining to clients the need to switch over to Adviser Charging and, at the same time, explaining their new charging structures which Skandia have introduced in anticipation of the forthcoming ban on AMC rebates for platforms. This suits us well, as it means we can cover two changes at the same time.

As most readers are probably aware, Basis 2 retains the flat half-yearly charge with partial AMC rebates (Skandia will still receive the rest of them) whilst Basis 3 is tiered perceantage charges but with all rebates, averaging about half the total AMC's, credited to the client's account in the form of additional units.

Some simple arithmetic on all the portfolios I've reviewed thus far shows that they'll all will benefit from Basis 3 because the rebates comfortably eclipse the total new platform charges. So all those clients will be paying less than they were before to be on the Skandia platform. So far so good.

The other side of the coin is that we're having terrible trouble with Skandia's online systems, both with entering new business and even switches within existing portfolios, hardly any of Skandia's staff seem to know what's going on or how to overcome these problems, Skandia's new application forms appear to have some serious design defects (you can't, for example, select different levels of initial AC for lump sum investments and transfers) and there appears to be no intention to replace our former BC.

In line with some other contributors here, I'm beginning seriously to consider stopping placing any further business on the SIS platform unless or until Skandia sort these problems out. My admin assistant has been finding them so stressful that, after five years with me, she's recently handed in her notice, which is very inconvenient, without another job to go to. What with all the reports and illustrations the SIS system insists she must produce, it now takes half a day or more just to process a simple ISA application, which is ridiculous.

For a usually well-run organisation such as Skandia to be suffering all these system glitches is both unexpected and most unwelcome at a time such as this.

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Ian Lees

Jan 24, 2013 at 10:37

@Julian Stevens - A point well made - and details of how difficult it is for AFA's and Financial Planners when looking to service our cusotmers. It will also be of assitance to all DIY entusiasts - who make a change to theri unit trusts etc., with their existing providers e.g scottish widows and standard life and Aviva - who offer direct sales and keep the commisons and trail - toward directors bonuses. It is also imortant to note that system glitches *( such as Gabriel ) are a result of human error - whether lacking in input or system construction. Finally isn't it great that tied agents and restricted advisers at SJ Place - has increased business of 46 % in the run up to RDR . . . then . . . .

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Scotty McJock

Jan 24, 2013 at 10:52

@Julian Stevens. Good constructive critique I thought. So is price the real reason that Skandia are apparently losing out? Transact for one aren't exactly the cheapest yet they do well and get rave reviews for their service from users.

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Sam Matthews

Jan 24, 2013 at 11:08

A platform can get away with being more expensive if it provides a very efficient service as this cuts down costs for advisers which means advisers can charge their clients less and so the overall cost to the client is less. where you have problems is if the platform is expensive and offers a very poor service so advisers have to invest more time which obviously gets charged to the client so it is a double whammy for them.

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Truly Independent

Jan 24, 2013 at 12:01

@Simon Mansell - You quote all the awards received, but all these were awarded in the past! Looking at their current service, which I agree with other comments here is appalling at best, with pricing which is also average in the market, you have an obligation to review your use of this platform going forward. FSA refer to platform due diligence as ongoing!

Platforms must stand on their own two feet and be sustainability on their own, irrespective as to the size of their parent. Skandia have cut down their support function dramatically and all this just to make a profit asap.

We are moving money off this platform now before it gets worse as we are obliged to give our clients a superior ongoing service for what we charge them.

Would you still pay to fly with British Airways if they charge a higher price than their cheaper rivals, but their staff numbers dwindle and their service worsens?

I fly with their cheaper rivals, because I get a no frills, better value service, and more importantly they still get me from A to B on time!! I don't need a breakfast or dinner on the plane as I can get this somewhere else before I fly! They also use the same aircraft and engines to get me there, albeit the interiors don't look as fancy!

The wrap market is exactly the same!

Ryanair, loathed by many I know, made a net profit in 2012 of over 1bn Euros for giving a cost effective, no frills service which is on time more than 90% of the time. How could you ignore them?

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Jan 24, 2013 at 13:37

I myself have fallen foul of a Wrap provider (insurance company wrap) giving special terms in return for an indication/target level of business and then changing the terms after one year despite targets being met. It does make me nervous given the investment in terms of building a service around a Wrap and then having to change. So I take that point.

That said we currently use two Wraps. A low cost option (cheaper than Skandia) and a more expensive option offering market leading functionality etc. I don’t believe Skandia can compete with either in terms of functionality.

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Julian Stevens

Jan 24, 2013 at 14:07

Until recently, Skandia and their BC served us very well. Cock-ups were rare and nearly always swiftly sorted out. The few that we felt justified in complaining about were acknowledged, accepted and compensation was paid ~ no messing about.

Their new Basis 3 charging structure looks very good to me ~ but, of course, this has to be backed up by good functionality and good service, both of which appear just now ~ hopefully not for much longer ~ to be in something of a crisis. Why they've felt it necessary to introduce all sorts of changes to their online systems we just can't fathom ~ it's not as if we haven't got enough else with which to contend just now.

I am very reluctant to use the platforms offered by companies such as Standard Life, Aviva or AXA Elevate, for the simple reason that they've basically reinvented themselves as new entities and left their life companies running more or less on empty. That's a betrayal.

We tried to place one item of business with TransAct (an offshore Bond) but it was such a nightmare that I'm disinclined to consider them ever again.

Novia are only 15 miles away from us in Bath and contacted me to complain about a disparaging comment that I'd posted on CityWire, but invited me over for a look round their set-up. I responded suggesting they might like to send over one of their field staff to see me and give me a demo online. Nothing more was heard.

The CoFunds proposition was a disaster in waiing from the word go (many years ago) and so it turned out, though I assume they've now fixed this and I generally hear good things about them but never receive any contact.

Of all the others, I either know (virtually) nothing (who are Avalon? Or WealthTime?) or they refuse to send anyone to see me (hardly surprising, as we're only a very small firm). And as for Fidelity FundsNetwork!!

So we've stuck primarily with Skandia, whose platform generally does everything we need, though just now it doesn't seem to do it very easily.

I'm hopeful of persuading my admin assistant to withdraw her letter of resignation....

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Ian Lees

Jan 24, 2013 at 15:27

I understand Avalon to be a large institutional facility - wealth time is a name I have heard but no nothing about them . There is also Pershing .

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Truly Independent

Jan 24, 2013 at 15:49

If it is our belief that a Wrap Platform is merely an administration tool and facilitator for accessing investments at institutional charges then why don't these wrap providers just charge a flat annual admin fee per client or per wrapper irrespective of amount invested, as I still don't know how I can justify and show my clients such a difference in charges to essentially facilitate the same thing?

Client A) Has £25,000 pays 0.5% for an Investment Account

= £125 pa

Client B) Has £250,000 pays 0.34% for an Investment Account

= £850 pa

Client C) Has £1,000,000 pays 0.28% for an Investment Account

= £2,800

Why should Client B & C supplement the cost of Client A. The actual cost of servicing a client on any wrap platform should surely sit somewhere in the middle of Client A and B at say £500.

I think we need design our own wrap platform!!

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Jan 24, 2013 at 16:14

I for one am with Julian on this. SIS is experiencing teething problems and we are all haveing to get to grips with the New World Order. It's not about being the cheapest so long as the costs are reasonable and to me it would be a nightmare to switch to another platform at this time as it could very well be out of the frying pan into the fire.

In addition, we all know that investors can be reluctant to big changes even when the potential benefits are explained so to switch from one platform to another on the basis of a small cost saving would create a monumental amount of work for us for each client which we would then need to charge the client for, thus eroding any benefit. One of the FSA required outcomes of any transaction is that there has to be a benefit for the client otherwise there is no point.

I say it's early days and everyone needs to calm down and just get on with it as best as possible. It is the FSA that created all of this so I believe they ultimately have a significantly responsibility for the current situation, whether the like it or not.

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Ian Lees

Jan 24, 2013 at 16:32

I believe RDR ( the remedial retail review ) has been a GREAT SUCCESS ! The gratuitous extermination of IFA's Tied , restricted and Independent for and on behalf of the FSA. Last years sales toward the end of the year - upbeat and wil enjoy good returns for a couple of months - and it will be interesting to see the results of product sales - now that insurance companies cannot use the commions or threat of agency termination - to drive their sales. The power is in the hand of the consumer . Already the Daily Mail has reported the restrictions placed on cusotmers of banks - where clients are segregated - and funnelled depending on their status and money held - Phlebs or commoners middle classes or FSA employees. Minimums are already in force.

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Jan 24, 2013 at 16:44

If archaic solutions with poor functionality and fund choice fail to improve then rightly so the legacy book is at risk.If the servicing adviser can provide an improved solution at a potential lower costs then surely due diligence would generate such an outcome.

As advisers search for new clients to work with I would suggest that clients that stay with old supermarkets will provide a huge opportunity to be moved to another adviser.

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John Phillips

Jan 24, 2013 at 17:22

OK guy’s, so why not use these threads to evaluate which providers we should be considering? I have tended to sway towards Cofunds after a bad experience with AXA Elevate, which was being considered as the main platform for all our business at the start of 2012.

Cofunds have their problems and can be frustratingly slow to rectify matters but normally put matters right after a bit of prompting. Skandia had been my main platform of choice from 2005-06 onwards but became more expensive and therefore fell out of favour. I have looked at Novia, Funds Network among others but seen little to persuade me it is worth re-registering client over to either of them.

I’m currently evaluating Standard Life and would welcome anyone’s thoughts or experience with them, good or bad.

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Julian Stevens

Jan 24, 2013 at 17:47

Everyone seems to have different experiences with differnet platforms. I was told by someone who uses them for eveything that TransAct were great ~ but for me they were anything but. Some people in the past have said they've found Skandia terrible, though (until just recently) we've found them generally very good.

We've always found Fidelity Funds Network to be a pain and they refuse to re-register off their platform any funds but their own, though that may now have changed. Reportedly, re-reg'ing off the CoFunds platform is a trial and a half, though we've never tried it.

I've heard good reports of AXA Elevate, but for reasons mentioned earlier I'm reluctant to use them. For me, it doesn't cut it for the Elevate BC (if you can ever get to talk to him) just to say that AXA Sun Life is a "different company". To me, it's all AXA. A bit like our Prudential BC 20+ years ago claiming no association with Prudential Holborn.

We speak as we find.

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Ian Lees

Jan 24, 2013 at 18:12

One of the biggest issues with all providers is theri lack of experience or common sense - to assist a supplier of business ( an IFA or toed agent ) to place the business. It almost seems as though they are making it as awkward as possible or as difficult as possible - either for their own weird control for the power crazed providers - or they know there is no competition. I have had a run in with some providers - who refuse to provide service - which makes my job harder. I found that co funds were great in the early days - when business was transferred away form scottish widows - who refuse to provide an agency. Fidelity funds also. But then fidelity is owned and run by standard life - who decide onwhether an adviser can place business with fidelity. I assume this is " Proctectionism " when advisers complained to standard and Sir Shady Crombie - refused to address the excessive chargesof pension schemes and the double charging structures - so he terminated IFA's to new business -to " teach them a lesson " and to prevent advisers taking highly charged prodcuts form standard life to Fidelity or Co funds. Cost in my opinion is not the isssue. for those who wish a cheap service - let them go out and find one. We believe that our "service proposition to be the most significant factor ", in what we provide. If it costs more let the customer know - let them see what is on offer - and those who do not wish to pay - or are "cling ons" - get rid of them. A good adviser only really needs up to If you work 40 weeks of the year, 3 days a week , one client a day - that is 120 clients ! Damn I am two short i'll have to go out and work ! ? ! again I did that last year ? at £ 2,500 each client it is £ 300,000 turnover. Costs and regulatory fees £100,000 a wee bit for the tax man - reduced by pension contributions at 50% - five employees - and great service - why would you wish to expand ? Interestingly the TSB ( who own Halifax Bank of Scotland ) are currently engaged on insulting all businesses with less than £ 2,000,000 turnover - as being " Micro Businesses ". So that will be Glasgow Rangers and Liverpool then ? Bank of Scotland - the Bog Off Bank - have a look at their "vantage" account ( H L especially ) . HL use Haliflags Blamnk of Slopland . . . . . . . for their accounts ?

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Simon p via mobile

Jan 24, 2013 at 18:15

Julian - axa sold axa sun life to friends so the elevate BC is absolutely correct to say its nothing to do with axa. An odd reason to discount a platform - because the parent company sold a lot of legacy life business.

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Ian Lees

Jan 24, 2013 at 18:17

Steer clear of Co Funds appalling service and the management are worse ! Good service from transact , Elevate and Pershing . SWIP and Swindle lost 38 managers from 40 funds - now that is negligence - scottish widows elevator pitch and their "slow " gan - should read . . . "separation is everything "

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Jan 24, 2013 at 22:14

Cofunds - A complete shamble who refuse to compensate advisers for their time when things go wrong and it is 100% Cofunds fault. Apparently they refuse to compensate adviser firms for the additional time a firm spends in rectifying matters for a client. In this case the time spent was 2.5 hours and the reply I eventually received after 4 moths of chasing read as follows:-

"The invoice that you submitted has only just made its way to me so I apologies for the delay in getting back to you.

Unfortunately we do have a policy in place that states we are unable to pay for adviser’s time."

In other words, they couldn't give a toss about my time which they consider to be free of charge. I appreciate we receive ongoing trail but this is to meet the costs of ongoing servicing and advice. Not to cover the additional costs created by Cofunds.

Fortunately the client is aware the problems created were not our fault and we worked hard and put significant pressure on Cofunds to rectify the situation which they initially denied was their doing. For a client with approx £250K you would think they would be more TCF but clearly this concept is alien to them (in my experience).

I wouldn't go near them with a sh*tty stick and we are currently reviewing the options for the client to move away from Cofunds as we both feel they do not deserve to (badly) administer her capital.

Sometimes when a provider fails to treat the adviser firm fairly this is the only option available and in the RDR world it is now much easier to do this without the client incurring any switching costs.

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Jan 25, 2013 at 09:27

Its amazing the marmite effect that Skandia based articles hason this site. I have also lost my Skandia consultant and very sad it was to lose such an assistant to my business. However, I spoke with Skandia management about this and was reassured and introduced to his replacement straight away. I continue to receive the service I would expect. Its probably not what it was, but it's enough.

You can't compare the service from "old Skandia" with that of SIS. They were a Life Office with associated large pots of cash where they could always offer great service. Now they are competing with the Wraps who have absolutely NO field based support, so clearly things have to change. My firm uses mainly uses two other platforms as well as SKanida and the support I receive from Skandia is far far superior to that from the other platforms. The only other platform that seems to offer similar levels of support as Skandia is AXA Wealth / Elevate (who I have used only a couple of times) - but with only 6bn under management, i wonder for how long they can afford to offer that level of support. They're another example of a former Life Office trying to compete against Wraps, slashing their wrap fees(PM's Suicidal pricing perhaps?) but still with much of the old Life Office expenses.

Look at the bigger picture guys - I don't think that there is a platform that is more intuitive or easier to do business with than Skandia - yes they're looking a bit more pricey than others these days, but their reporting to us as advisers is class leading and the data they can provide for clients is outstanding.as IFAs, our objective is delivering positive client outcomes, and SIS can help us generate and demonstrate just that.

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Julian Stevens

Jan 25, 2013 at 12:43

To Simon P ~ Okay, here's the sequence of events:-

1. Sun Life was for many years a successful and generally popular company with IFA's and the public alike.

2. The winds of change started to blow and Sun Life started to feel the pinch. Sells itself to AXA.

3. The winds of change start to blow even harder. Sales of Endowments and Investment Bonds decline. The era of the platform has arrived.

4. AXA realises it's on the same road as so many other life offices that have shut shop and just become legacy outfits.

5. AXA decides to reinvent itself as a platform operator. What to do with the old life company?

6. Flog it off to Friends Life as a zombie policy book that we persuaded IFA's to sell for us over so many years, dump it on somebody else, we aren't interested any more.

7. When IFA's complain about the poor service from Friends Life on the old policy book, just tell 'em we're a complately separate company, nothing to do with us, no can help, seek assistance elsewhere but don't bother us.

8. Sorry AXA, but for me that ain't good enough.

Get it?

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Simon P via mobile

Jan 25, 2013 at 13:07

I do get it. Sadly you don't. Axa Wealth are now a wealth manager of which a platform is part of their business. They retained the old winterthur individual business which is off platform as well have having an offshore business and architas multi manager. I think they even kept the old Michael Parkinson funeral insurance products. God knows why - presumably very profitable. A quick google search and a look at their website tells you this - perhaps you would do better researching providers properly. Now you can bash them for the decision to sell their old business to friends - thats fair enough - but I honestly don't know what you expect them to do about the service friends life currently offer. Axa cannot do anything about this whatsoever so I'm not sure what you expect them to say. To rule them out because friends now provide a poor service on policies axa no longer own or have any control of is quite frankly moronic. Your previous comment 'to me it's all AXA' just shows you don't know what you are talking about. Get it? I doubt it.

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Julian Stevens

Jan 25, 2013 at 13:22

Calm down, asshole ~ it's only a discussion forum.

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Sally Jones via mobile

Jan 25, 2013 at 13:35

@julian - you made ill informed comments, someone corrected you and their the asshole??? Hmmm. That makes you an arrogant asshole I guess.

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John Phillips

Jan 25, 2013 at 13:40


Had similar experiences but didn't bother with the chase as it is further wasted time. If your client is up for it, get them to send a paid invoice, for reimbursement of the fees you charges them, as they had to pay you to fix the problem caused by Cofunds.

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Jan 25, 2013 at 17:04

What do we want ......


Ease of use

Minimal paperwork e.g at point of disturbance



Ongoing development

Competitive price

Confidence that the enabler will survive.

When you look at the long list of solutions available there are very few that tick all the boxes. What is obvious to the market is for those that are brave enough and forward thinking enough to upgrade their enabler the outcome is usually better for the client and also for the adviser firm. For those that stick with the early adopters out of habit and apathy will leave themselves vulnerable to clients wanting more functionality for a lower price.

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Mad Eyes

Jan 25, 2013 at 17:19

One minute we are having a wrap discussion. Next minute the gloves are off and the claws are out!!

@EVHE It appears clients want something similar to us then. Spot on

I bet Mr Mann wished he'd never opened his mouth now!!

Anyways gotta go its Wine time! Oh and i wont be buying the cheapest bottle

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Ian Lees

Jan 25, 2013 at 17:25

What do we want ? When do we want it ? sounds like another American invasion . . . . still one open mouth seems to stir up a whole lot of answers mister mann might not get onhis " survey ?" Has anyone seen any improvement in skandia service ? That is how you judge a quality company - how has it dealt woth the issues, Has it dealt with the issues ? They do not need to deliver on price . . . . they need to deliver on service, quality of service unless they are intending setting out their own salesforce ( like other companies - so they can retain their extraordinarily high charges . . . . - oto pay bonuses to their bosses . . rather than provide quality of contract appropriate contracts - and service. This is the reality of RDR - the new allowances , allowing insurers to set up theri own salesforces direct e.g scottish widows.

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Jon Short

Jan 25, 2013 at 18:49

Dear Peter Mann

You must really understand your customer-base, the IFAs. You must really understand that crowing about having a critical mass of unprofitable assets under management is congratulating yourself on less profit. You must understand how removing resources from your customer base and passing the costs of your production onto them would be received. Well done!

You must really understand the business logic of getting rid of the branch network, followed by the experienced consultants, IFA sales directors and experienced staff in exchange for the cheaper, less talented dross you currently employ. Yes, Peter, you’ve just got rid of your fire fighters and started a load of fires with an IT system rolled out for RDR where the “I” is for inept and the “T” is for trash.

In summary, you have to really know financial services inside out to ruin a good company as fast as you have, turning it into the industry’s Nokia. Remember that Scandinavian company? Good effort!

I’m sorry I cannot write a longer letter, please excuse me, Peter. I need to find a platform to switch my Skandia holdings onto, which requires my time, instead. Just think, if you added 5bps back, remembered who your customers are once more and used this extra income to give them back service, perhaps you’d not lose the funds you undoubtedly will from the industry; the way you are running things.

Yours sincerely

Jon Short

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Ian Lees

Jan 25, 2013 at 20:03

@Jon To understand the reason behond the withdrawal of service - you forst need to understand the mentality - of an insurance company. Paying commision to advisers whetehr tied of independent does not sit well with htem - as it is an expense. Insurance companies used to offer " Agencies ", under the Law of Agency - which allows the power crazed insrance company directors and their wage slaves to control the agent ( tied or independent ) - in terms of money and new business. The fear factor at insurance companies is the IFA has the client relationship - and if upset may churn the business to an other provider . This happened when IFA's were offerred up to 188% of Laurtro rates - which permitted those involved e.g scottish widows - to " act out their contrl over the agent ". Skandia are going throough the same itinery. Great news for sound advisers is the achoevemtn of the wrap account - which has assisted independent advisers to offer a great all round service - transparency ( and no stalanist freak control merchants from scottish wodows or elsewhere". Scottish Widows refused to provide me ( my practice ) with an agency - no reaosn given - but I was aware of the levels of commisons scottish widows was able to offer outsiders ( other IFA's - and the volume of business they had to agree to under contract ). SW broker consultants do not get bonus withdrawn - when an IFA's business goes of the books - to the cost of the mutual policyholder - and the agent ). It is these targets that insurance companies use as the whip and carrot - for greeedy IFA's to generate the same business over and over again - on the directiopn of the insurance company. Insurance companies have no control over the Independent adviser - but retain massive and sometimes excessive controls over tied agents and the restricted advisers. This could be the casue of " Undue Influence " over any potential cusotmer e.g Edinburgh based bank TSB ( which may be one reason it is known as the " Toxic Savings Bank "). As a result of high commissions for insurance companies to obtian ( or protect ) theri " market share ", their desire for world domination e.g standard life - which used to be one of the largest insurance companies in Europe, now. . . General insurance companies now control who your car may be repaired by - or who you must use to assass damage - or make a claim e.g NIG owned by the RBS - and the dealers who produe the business - may get to service or repair - put Simply removing competition to generate and cream off profits for insurance company directors - but providing little or no service for consumers. In the same way banks have been reduced - and consumers ejected - becasue they are not profitable enough for the Chairman - Segregation Separation of consumers - and reduced competition in the cosy cartels after lobbying MP's by their own . . . for their own in the most sinister scenario for consumers.

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Super Moses via mobile

Jan 25, 2013 at 23:35

@John Phillips: I have found Standard Life extremely awkward to use. It is not very intuitive and you need a really good knowledge of the system to get any business submitted first time.

You don't really get any warnings from admin support either, if you don't know you have made a mistake you are buggered. SIS are good at letting you know something is wrong.

With ADviser Charging they don't seem able to accommodate initial fees on reg premium stuff. You have to do ad hoc fees and I think this must be done manually but still sussing that bit out.

Overall, I don't like the Standard Life platform.

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Super Moses via mobile

Jan 25, 2013 at 23:45

@julian Stevens...if your admin assistant takes half a day to submit an ISA app on SIS you should let them go. Pathetic. Its really not that hard and any reports required are done at the push of a button. 15 mins to submit, send in a cheque with AC form and job done.

I would check what your admin assistant is playing at

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You must be joking

Jan 26, 2013 at 07:59

@ Julian Stevens

I'm intrigued to see your calculations which show that charge basis 3 offers a lower total cost than charge basis 2.

Would you mind posting a comparison here or letting me have your email address so that I can email you directly?


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Julian Stevens

Jan 27, 2013 at 13:13

Did I write that Skandia's Basis 3 Charging Structure is in all cases cheaper than Basis 2? I don't recall having done so. In a minority of cases it may not be but, because the partial rebates under Basis 2 differ according to the type of fund (equity, FI or tracker), it would be very time consuming to compare the two for all portfolios. Also, as far as I can tell, Basis 2 is only an interim structure which, once the FSA's total ban on cash rebates comes into force, will surely have to go. Presumably, Skandia will then have to switch everyone to Basis 3, as Basis 2 will cease to be an option. Basis 3 appears to be the default for all new accounts. If anybody wishes to correct me on this then, provided they do so in a civil manner, I will be prepared to reconsider my view, possibly stand corrected and acknowledge the fact.

Also, did I write that that I've totally ruled out AXA Elevate because of poor service from Friends Life? If I did, please remind me where. What I wrote is that I'm reluctant to use AXA because they've just washed their hands of all and any further responsibility for the administration of their legacy policy book despite, for many years, having encouraged IFA's to place as much business as possible with AXA Sun Life. They've just lost intererest in it, flogged it off and consider themselves now to have no further responsibilities towards it. Legally, that may be true but morally it's a betrayal because we, the IFA's who in the past may have sold some AXA Sun Life products retain indefinitely our responsibilities towards those products. AXA's view is That's your problem not ours, all we're interested in these days is getting as much business as possible onto our new Elevate platform.

As regular readers will know, I am not, as a rule, one to dismiss or deride the opinions of others just because they differ from mine. But I do find it objectionable when somebody describes my view as moronic just because it differs from theirs, even if theirs may be untimately turn out to be more on the mark than mine, which is entirely possible from time to time.

And finally, before I go out for my weekly bike ride, we used to find entering business on Skandia's system fairly straightforward but, in light of all the latest changes, the need for which is anything but apparent, the process appaears now to have become exactly as you (Super Moses ~ another silly pseudonym) describe that of Standard Life, namely "not very intuitive and you need a really good knowledge of the system to get any business submitted first time". Perhaps in a week or two, my assistant will have mastered the new procedures, but right now she's finding them a headache to get to grips with and getting a bit stressed out. These days. the system also seems to insist on the production of 2 risk reports and an illustration which all take up time. Whether or not these requirements can be bypassed, we haven't quite managed to figure out.

For all I know, there may well be people out there who find Standard Life's system entirely straightforward and would question why you or your staff seem to have so much difficulty with it.

We speak as we find and, as I've often posted, should respect the experiences and opinions of others here.

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Jan 27, 2013 at 13:36

The original point I was making at the start of this blog was how can any adviser recommend to a client that they should entrust their money to a platform that seems incapable of being run in a profitable manner.

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Richard SALTER

Jan 28, 2013 at 11:24

I would like to speak up for Fundsnetwork. Low cost, straght forward, user friendly and adding more products and adviser tools all the time. Oh yes and at £45 a year buying nil inital and free switching this has to be good value. The icing on the cake is great valuation and analysis combined reports and statemetns availbe 24/7 - and only through the adviser. I have not seen such complete and straightforward reporting and analysis anywhere else.

Yes we have clients scattered across several supermarkets and platforms and the usual legacy problems thrown in but compared to the mystifying Cofunds and even more bewildering Skandia with its two platforms and sign ons and now 'teething troubles' for its latest incarnation - better the devil you know.

(As far as i am aware the big IFA fear from Fundsnetwork of big brother taking over our client bases has not come to pass and must be diminished now with the freeing up of re-registration. Rather FNW has grown and developed its offerring and certainly is doing everything to avoid alienating its business introducers - IFAs. Well worth a look in my book.... They may not be sexy nor as indpendnet as Transact, Nucleus etc but then these are surely more likelyto be sold than a supermarket (sorry platform) held by owners with such deep pockets?

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Jon Short

Jan 30, 2013 at 14:44

@Super Moses (made up name)

Perhaps Julian's admin assistant is trying to proceess an ISA transfer? Skandia cannot do ISA transfers at present. The Skandia elastoplast is for us to prepare an illustration regardless of size (no £11,280 limit on their software this week until South Africa works out what an ISA is), complete an online submission, complete a paper form also, submit them both to Southampton so it can then send them back -because we should be redesignating, not transferring (whether cash or not).

Unless Skandia is closed for snow, of course. In that instance, your paper proposals stay in the post room with the stuff still there from mid-December.

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