A spokesperson for Skandia said it has built the unit rebate mechanism into its current model and will use it to the advantage of its platform users by making sure it has the best net fund costs available on the market.
Its annoucement came just hours after Standard Life pledged to scrap rebates altogether.
The firm, which has £42bn in platform assets in the UK said it would try where possible to offer clients preferentially priced share classes, also termed ‘super clean’, but believes moving to standard clean share classes that already exist in the market and paying a rebate on top of that was a more immediate solution.
Skandia’s move comes after HMRC announced investors should pay tax on rebates received from platforms from tax year 2013/14.
The Tax Incentivised Savings Association (TISA), supported by the UK Platform Group, is currently petitioning HMRC for a delay to the proposed rebate tax but Skandia said the unbundled charging structure launched for its platform in December was designed to accommodate tax on rebates anyway.
Skandia’s spokesperson said its decision to offer rebates on top of standard clean fee share classes, which charge an AMC of 75bps on most equity funds, was one that had to be taken quickly in response to HMRC’s announcement at the end of March.
Clean fee share classes charging 75bps plus a rebate of up to 7bps will still offer investors a lower AMC, as they will still get 80% of the benefit from that rebate if they are a basic rate tax payer, the spokesperson explained.
“There is nothing stopping us rebating further from super clean if we can agree that with the fund group so that we can always offer the best fund cost. For that reason we deem the rebate mechanism important. And if a fund group says we don’t want to offer 75bps, as a lot of them already have, we still can through using rebates,” he concluded.