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FTSE license charges leave wealth managers seething
Markets
by Danielle Levy on Apr 19, 2012 at 09:35
A number of wealth management companies are being asked by FTSE Group to pay substantial amounts for a licence to quote any of its indices in client literature, including the FTSE Apcims benchmarks.
Wealth Manager understands several small and medium-sized firms have been approached by FTSE representatives and asked to pay a standalone fee to quote any of its indices. This has been stripped out from the fee they may have formerly paid for data feeds. It is understood the sums requested depend on assets under management and numbers of registered individuals.
One wealth manager, asked to pay around £40,000 to quote FTSE indices, railed at the lack of flexibility being offered, with the firm asked to pay for whole series of indices.
‘We have no objection to paying, it is just the lack of flexibility, which means if you need half a dozen indices you end up with 800 indices at a huge cost,’ he said. As the firm uses FTSE Apcims benchmarks, he suggests Apcims should tie up with other index providers.
Another wealth manager also recently approached by FTSE, said: ‘For the numbers involved and as the information is so readily available, it has been quite a shock. Prior to this, anyone could make reference to an index in performance statements, accepting that this was readily available information rather than needing a distribution licence.’
But a spokesperson for FTSE denied any changes in its commercial policy, particularly for Apcims members. She added: ‘Our current licensing requirements remain. There may have been some members who were not aware of this.’
The Association of Private Client Investment Managers and Stockbrokers was unavailable for comment.
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Bankers should face jail for reckless behaviour and wait longer for bonuses
by James Phillipps on Jun 19, 2013 at 07:59
5 comments so far. Why not have your say?
James Carthew via mobile
Apr 19, 2012 at 11:08
They started doing this a couple of years ago - I resolved to make as little reference to FTSE Indices in my reports as I could get away with and would urge you to consider alternative benchmarks. How they can justify charging anyone to refer to information that is freely available in countless publications is beyond me.
report thisMr Blue
Apr 19, 2012 at 11:11
We were approached too - they wanted £50,000. Let's be honest, it's simply not worth it...especially when considers the fact that the composition of the APCIMS indices does not reflect the way in which the many wealth managers invest (they only represent the tradtional) - e.g. bond exposure is FTSE Gilts All Stocks, no credit at all. In my mind it's easier to create a composite of non-FTSE indices and explain the issue to clients.
Think they need to get real with their charging structure - there is no value. Something so simple can wipe out a lot of company margin - result have to charge clients more for no extra benefit, in the end resulting in lower fees for FTSE.
I'm sure they will put forwards lots of clever arguments as a rebuttal - but whatever...there it is.
report thisMr Blue
Apr 19, 2012 at 11:20
Imagine the small one man band IFA, who mentions FTSE in a client report - £30,000 , thanks very much for coming - ridiculous. Advice: do not disclose - they are like bulldogs.
report thisan elder one
Apr 19, 2012 at 13:22
A thought, naive perhaps, approve a new index (benchmark, whatever) recognised in the trade and made public, derived from FTSE and whatever; thus avoid the name.
report thisCoeurDeLion87
Apr 23, 2012 at 17:14
I recommend that a few bods consider taking the CISI Integrity Matters examination. It's a snip at £20 and if you don't get an 'A' PASS the CISI will write to you to say 'well done' and then ask you to take the examination again. I just can't see what all the fuss is about over a few thousand smackers for an Index that is rigged anyway. Surely if it's a copyright issue a few brains can simply publish the relevant index as Footsie *****. That should do nicely Sir!
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