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Standard Life to unbundle platform pricing in Q1 2014
by Jun Merrett on Aug 09, 2013 at 14:30
Standard Life is set to launch its unbundled wrap platform pricing structure in the first quarter of 2014.
The Standard Life Wrap currently operates on a semi-bundled structure but will move to the new structure in February or March next year and will show a clear fund cost, platform cost and adviser cost which will be rebate free.
The launch will be just within the Financial Conduct Authority's rule that all platforms must unbundle by 6 April 2014.
Although most wrap platforms originated with unbundled pricing structures, fund supermarkets have had to move away from their bundled offerings. Fidelity FundsNetwork was the first when it launched its new unbundled structure in April 2012, followed by Cofunds in September 2012 and Skandia in December 2012.
David Tiller (pictured), head of platform propositions at Standard Life, said the new pricing would be competitive and reflect the adviser discounts it had been giving firms historically.
'What we're moving to is a very clear, discreet charging structure so a client will see a platform, advice and fund management and a discretionary fund management charge,’ he said. ‘At the moment, we also give large adviser discounts and instead of having a high headline price and rebating away from it, so the price you see is the price you pay.'
The platform also plans to have a 100% clean share class model by the end of 2013 with around 2,600 funds. All funds on the platform from 2014 onwards will be either a super clean share class, a preferentially discounted share class compared to the standard, or an industry standard clean share class.
Standard Life will begin bulk converting all holdings on the platform to the clean share classes from November. Any funds that do not have a clean share class version by the end of the year will not be closed but Standard will no longer issue the rebate.
Tiller said: 'We are making a clean break by converting all funds on our platform in bulk to unbundled share classes.
'We're doing this ahead of the Financial Conduct Authority deadline, as we did with the retail distribution review , so advisers can focus on adding value for clients rather than asking them to manage the tax liability, deal with platform legacy issues or coordinate a drip feed conversion process over the next two years.’
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