Alliance Trust Savings hikes fees on Sipp and investment accounts

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Alliance Trust Savings is overhauling fees for its direct and advised businesses from February 2017, including increasing its “inclusive” account charges for the first time since 2014.

From 1 February, Isa and investment dealing account charges will increase to £225 from £150 per year – a 50 per cent increase, Fund Strategy has learned.

Sipp savings account fees will rise to £350 from £275 per year, and Sipp income account charges will increase to £440 from £365 per year.

Fees on inclusive accounts will include 35 online trades, as opposed to 37 previously.

Any online trades above the 35 included in the account charge each year will be charged at £6.25 per trade.

An ATS spokeswoman says: “[We are] increasing our inclusive account charges for the first time since early 2014. This is to better reflect the cost to us of providing this service and even at their increased level these charges are still extremely competitive at larger portfolio sizes.”

Bulk discounts

ATS is also introducing a £700 charge on its inclusive wrap accounts that it says will discount charges for advised clients who access the “full suite” of inclusive accounts and services.

Online charges in the standard charging option will all decrease, with the base price dropping from £12.50 to £9.99.

Account charges in the standard charging option – including for Sipps and Isas – are to increase but will include four online trades a year.

For both the standard and inclusive options, ATS will increase telephone and postal trading charges where trades could be done online. However, it will also introduce a loyalty discount for telephone trading.

It is also increasing charges for paper customer communications.

The ATS spokeswoman says: “Our prices remain very competitive, particularly at larger account sizes and a sizeable portion of our clients will see no material impact on the value of their investment portfolios or be better off as a result of these changes.

“As a flat fee provider our prices do change from time to time, but they are transparent and fair and our customers can be certain what they will pay. A percentage fee provider is effectively changing their cash price to the customer all the time – every time a customer adds money to their account and as markets go up and down.

“We are confident in the products and services we provide and in the longer-term benefits to customers of our fair, flat fee approach, but for any customers who want to leave as a result of the changes, we are waiving our exit charges until 27 January 2017.”

Competition pressures

Candid Financial Advice director Justin Modray, who uses ATS for some of his clients, calls the charge increases “bad judgement”.

He says: “Service over the last year has been poor and the management team has made a very embarrassing hash of launching the new platform technology. ATS should be more focused on fixing its problems than implementing a big price increase, which will further alienate advisers and their clients.”

Modray adds: “We are firm supporters of the fixed platform fee concept, but ATS is doing itself no favours and this segment of the platform market is crying out for competition.”

Platforum head of direct Jeremy Fawcett says that ATS price changes may put other platforms off mirroring its fixed annual charge model.

He says: “Platform pricing is fiendishly complicated for consumers to grasp which makes it difficult to differentiate on price alone. Having said that, there are now several D2C propositions that use the fixed annual charge model that Alliance Trust Savings has always had. This could mean that end investors, particularly those with large portfolios, will start to notice that this is a good option for them. The ATS price hike won’t help this trend to develop.”