Standard Life has slashed charges in its Elevate platform, but it has been highlighted that the firm raised prices before it made the cut, making them “look better than they were”.
The firm has announced that the new pricing represents a 25% reduction to its current standard terms and will be available to new clients from 1 April.
But Adrian Lowcock, head of personal investing at Willis Owen, noted: “Standard Life did raise the charges on Elevate before they cut them, so this does make them look better than they were.”
However, he added the latest price cut “reverses the previous rises and then some” which makes it one of the more competitive propositions on the market.
Elevate pricing for new clients effective from 1 April
| Portfolio Value | New charge | Current charge |
| £0-£149,999 | 0.30% | 0.36% |
| £150,000-£749,999 | 0.25% | 0.36% |
| £750,000-£999,999 | 0.25% | 0.33% |
| £1,000,000-£1,499,999 | 0.20% | 0.30% |
| £1,500,000-£2,499,999 | 0.20% | 0.25% |
| £2,500,000-£4,999,999 | 0.15% | 0.25% |
| £5,000,000+ | 0.10% | 0.25% |
Mark Polson, founder of the Lang Cat, said the change that matters is for the £150,000 – £750,000 portfolio value category, from 0.36% down to 0.25%.
“That’s quite aggressive, especially considering Elevate has stepped pricing, which means that the entire pot is charged at that amount, rather than the blended, tiered trick-of-the-light approach adopted by most platforms.
“I’ve always liked Elevate’s stepped shape; I’m glad to see it’s staying.”
Departing assets
However, Polson said from his experience Elevate is one of the platforms mentioned by adviser firms that they’re taking assets away from.
“Standard Life Aberdeen has put some investment into the platform lately, which is welcome, but it’s not easy to stem the tide. No doubt fingers are crossed that this cut will help,” he said.
He outlined that admin could be an issue with the pricing structure. “If you’re an existing customer, you either have to have the new pricing switched on for you by your adviser filling out a form – I’m really hoping this isn’t a paper form – for each client, or hang on till the end of 2019, when Elevate will ‘best price’ you. So, if you’re on a discounted shape which is better than the new one you’ll hang onto it, but otherwise you’ll move onto this.
“So there is the potential of eight months of your client paying more than they need to unless you’re up for the extra admin. I’m told this is a development thing; it’ll take more time to build all the automatic switcheroo stuff, and I’m sure that’s true. Still a bit of a faff though.”
But he added that it is welcome news, and while it may not change how firms feel about Elevate, “it’ll certainly remove pricing from the discussion – and I imagine the Elevate guys will be hoping that it’ll make it harder to justify a transfer away”.
Elevate vs Wrap
Discussing the differences between Standard Life’s platforms, Poulson said:”SLA is trying hard to position Elevate as a streamlined, no-frills alternative to Wrap, its considerably more fully-featured cousin. Parmenion, elsewhere in the stable, is ploughing a different furrow for the moment.
“One of the problems – and there are plenty – with this positioning has been that it’s perfectly feasible for Wrap to cost less than Elevate, which kind of snookers the whole ‘wrap-light’ kind of agenda. This price cut is clearly meant to take care of that.
“That’s not the only issue – there are plenty of firms on Wrap who don’t use the full extent of its (pretty impressive) DFM model portfolio functionality. What does this mean for those clients? It’s hard to imagine SLA going as far as cutting its own throat to move books from Wrap to Elevate, but maybe it will.”
Not a fair comparison
David Tiller, head of UK propositions at SL, said: “This new pricing is a demonstration of Standard Life’s commitment to Elevate for the long term, and it was important to approach it in the right manner. We had to know that we had put in place the scalable, sustainable model required to underpin this really competitive price point.”
The langcat’s heatmap is below and includes Elevate’s old and new pricing structures.
But, Lowcock said: “Another interesting point is that elevate don’t seem, to differentiate between ISA and SIPP money which others do, which makes it harder to give a fair comparison.”
Polson added: “We’re going to see more of this as platforms tire of incessant behind-the-scenes dealmaking and get the rate card down to something resembling reality.”
