With effect from 1 February 2014, the annual administration fee for the platform will increase to £75 (from £40) + VAT for an ISA/investment dealing account and £155 (from £135) + VAT for a Select SIPP.
The new fees will include ad hoc activity such as corporate action fees and cash withdrawals on non-SIPP accounts that was previously charged separately, which ATS believes will provide greater transparency and certainty over the cost of its services. Online and offline dealing fees remain unchanged and fees on child accounts have been frozen.
Patrick Mill, managing director of ATS, said the platform remains fundamentally committed to a flat fee model as the value of an individual account does not change the cost of administering it.
“We believe percentage charging structures are simply a tax on wealth. However, we have listened to feedback from our customers about the service we provide, our online service and the ad hoc charges that we apply to their accounts. Based on this feedback and the increased demand on our business, we have decided to move to a single, all-in-one administration fee which covers all regular activities customers carry out on their accounts.
“We believe customers will understand that these price increases are necessary in order to ensure we maintain consistently high standards and quality of service,” continued Mill. “We are also making a commitment to our customers that we will not make any further increases to our charges until 2016 at the earliest. Nor will we increase the online or offline dealing fees.”
Other platforms, however, seem unlikely to follow suit. Patrick Ingram, head of corporate relationships at Parmenion, said it would definitely not be increasing its fees.
Transact has actually cut its charges a total of nine times since it first launched, noted Glen Sweet, head of sales.
“This is clearly down to economies of scale. Every year we take a view – is [the fee] affordable and is it sustainable? The most important thing is the platform is there, viable and profitable. We want to set charges at a sensible level.”
Changes to fees do not necessarily mean the decision was wrong in the first place, said Sweet, adding: “The numbers may have been in the wrong place to start with, or the dynamics of the business may have changed. But some providers are still working on negative margins, and the only way round that is to get many tens of billions very quickly.”
Alliance Trust raising fees
Investment platform Alliance Trust Savings (ATS) has raised its annual administration fees in a move it said will allow it to maintain the quality of service to customers and to continue to meet regulatory standards.
