The fund supermarket, home to £43bn under management, first announced its intention to champion clean share classes with a fresh pricing plan 12 months ago. A number of fund groups have unveiled their RDR-ready share classes this year, most recently this week was Threadneedle and M&G.
Alastair Conway, Cofunds’ sales & marketing director, said: “The idea of a retail share class that solely covers the cost of fund management seemed radical even a few short months ago. However, a year on from when we first announced our push for clean share classes, it’s become a reality.
“For some fund groups the move to a clean share class has simply involved repurposing their institutional share class, even so for all, it’s demonstrated a real support for simple, transparent charging and that’s got to be good for end investors. Importantly, it’s also good for advisers as it clearly defines each chargeable element of the value chain and in so doing should make it easier to explain the fee-based world to clients.”
The FSA set out its proposals on banning cash rebates to consumers for all advised sales of retail investment products in its consultation paper 12/12.
“The message from CP12/12 was clear: life is going to be easiest for those platforms, advisers and fund managers who embrace pricing in its simplest form,” added Conway.
“This is an essential step towards enabling people to accurately assess the value of the service they’re receiving – resulting, one would hope, in a shift away from a preoccupation with knowing the price of a service without an appreciation of its value.”
Clean share classes, and the future of the platforms market, will be discussed in the forthcoming September issue of Portfolio Adviser, out next week.