Standard Life mulls wrap fee shake-up

Standard Life is considering a revamp of the charging structure on its wrap to attract high-end advisers as it segments its client base with the launch of the FundZone platform.

Currently both the FundZone and wrap have the same charging structure but Standard Life chief executive Trevor Matthews admits its target audience of financial planners may look for more explicit charges, forcing a change.

At the moment it doesn’t disclose the full charges on the grounds that it could reveal commercially sensitive information.

Matthews said: ‘The FundZone charging structure is pretty robust and it will appeal to transactional advisers but we have an open mind about the charging structure of the wrap.

‘Although there is transparency in the total charge at the moment we will absolutely rethink the charges if there is a demand from the more sophisticated advisers that we are marketing the wrap to.

‘We could switch to a more unbundled structure for the wrap and keep a bundled structure for the FundZone, having both will allow us to provide a service to all types of adviser.’

Matthews’ disclosures come in the same week that the UK Platform Group, of which Standard Life (SL.) is a member, identified the variety of charging structures in operation as a key issue for the industry in a discussion paper that also called for disclosure on all charges.

But despite the leaning to transparency, the group stated that ‘such disclosure needs to be able to respect any commercial sensitivities within the value chain, especially where they do not have any net impact on the overall cost to the consumer’.

Peter McGahan, managing director of Worldwide Financial Planning and a user of the Standard Life wrap, said: ‘As the wrap market evolves, transparency will be become key. I would welcome a move to make the charging structure more transparent as it would make wrap charges easier to compare.’

Nucleus chief executive David Ferguson said: ‘Until we have complete unbundled transparency advisers and their clients will simply be unable to make an informed choice on which wrap or platform is the most appropriate partner for them.’