The current list of seven also includes Cazenove, Henderson, Investec, Neptune and Standard Life Investments with a further four to be revealed in the next month, the same timeframe for the pricing structure details for each fund.
An end to rebates
The announcement is part of Standard Life’s aim to start moving all of its platform customers to unbundled and discounted share classes by the end of this year, thereby removing all rebates. The proposition will include existing and new clients so there will be no legacy issues for advisers.
“It is a clear endorsement of our view that rebates are no longer sustainable in a mutual fund environment,” says Graham Dow, Standard Life head of investment group relationships. “Transparency is key in adviser charging, so it makes sense that transparency should now also extend to investment pricing.”
How this pricing will be offered will differ across each group – some will give lower annual management charges, others will provide a brand new share class while others are simply lowering the cost of existing propositions.
Standard Life’s announcement came hot on the heels of Investec announcing a ‘super clean’ share class for six of its UK-domiciled funds on 24 September.
Not everyone agrees
The group will offer selected strategic distribution partners a share class with a 0.65% annual management charge across its managed solutions and specialist fund ranges. The managed solutions range includes the Investec Cautious Managed, Diversified Growth and Diversified Income funds.
Yesterday (25 September), Axa Elevate’s managing director David Thompson confirmed he has similar agreements with ten fund groups.
In contrast to Standard Life’s approach, Thompson said: “We believe that platform-wide conversions would not always be in the best interest of all customers. There are still cost differences between retail and clean share classes which could result in an increased cost for clients. Some fund groups are also yet to launch a clean share class for certain funds.”
As Portfolio Adviser has previously written, the issue of ‘super’ clean share classes has drawn conflicting views. Groups such as M&G have said they have no plans to offer major platforms preferential rates via super-clean share classes, believing that it will confuse investors. M&G also said that launching new share classes for each fund could be very expensive.
In its latest results statement Hargreaves Lansdown said it was making progress on negotiating preferential terms with the investment industry for its current Wealth 150 list.
