Following a report from Portfolio Adviser that Fidelity had created confusion by only launching its clean fee share class on a limited number of funds for discretionaries, Cofunds said it would continue to host Fidelity’s 1% bundled share class, but would pass on the rebate included within it.
Verona Smith, head of proposition at Cofunds, said: "We can still support 1% but what we will do is rebate the element that goes to the platform back to the end investor. We have not set the numbers we want from fund houses, we just want them to be clean share classes.
It is up to the company what they charge for their funds, but most fund managers are settling on 0.75%"
Fidelity is unusual in its limited offering of the clean 0.75% share class to discretionary fund managers alone.
It has not ruled out the prospect of rolling out the unbundled share class wider, but Ben Waterhouse, head of UK retail for the firm, said advisers are happy to stick with the bundled share class until the FSA officially bans rebates.
Most fund houses seemed to take the consultation paper published by the regulator a few weeks ago as confirmation rebates would be banned from January 2014.
Smith continued: "A lot were waiting on the consultation paper and once it came out quite a few came back to us and said we will go with the clean share class now."
In relation to Fidelity, Smith said Cofunds will have to do the rebates, but thinks this makes it more confusing for investors.
"Keep it simple and give us a clean share class," she concluded.
