View the article online at http://citywire.co.uk/wealth-manager/article/a727903
Rathbones to cut buy list if Hargreaves pricing not offered
by Eleanor Lawrie on Jan 14, 2014 at 14:23
Rathbones' head of fund research David Coombs has contacted fund groups informing them that if his firm is not offered the same prices as Hargreaves Lansdown they could risk falling off recommended lists.
As Hargreaves Lansdown prepares to unveil its new pricing structure and give more detail on its new Wealth 150 and core funds list, Coombs (pictured) said his company expected to access funds at the same price level as Hargreaves. If Rathbones is offered a worse deal, the funds could be removed from the company's internal buy list, Coombs warned. Rathbones currently allocates £8.5 billion to collectives.
‘We have already informed the asset management companies in writing that as far as we are concerned we do not want to be put at a competitive disadvantage,' Coombs explained.
'With Hargreaves, Standard Life or any other large institutions, it is really important these are input prices to our process and we would expect exactly the same deal.
‘In fact, any fund that is on that list where we are offered a worse deal will not be on our recommended list.’
On Wednesday Hargreaves Lansdown will unveil its new pricing structure following new platform rules that come into action in April which form part of the retail distribution review and will no longer allow platforms to take payments from providers on new business.
Hargreaves noted in its tender to fund management groups back in May that funds on the new core list would receive ‘preferential, ongoing and intensive distribution across all our available media’. Features include email marketing, more likely inclusion in model portfolios, and a premium position on the Wealth 150 website.
Hargreaves also pushed fund groups to offer it exclusive clean share classes in the tender and said it did not expect better pricing to be offered to others in the market, given its distribution, viewing ‘better prices as the “new discount”’ in a commission-free world'. At the time the direct-to-consumer platform said it also planned to only offer ‘substantial promotional coverage’ to funds that make it onto its New Wealth 150 and concentrated core list.
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