Completely clean share classes: it should be black and white

In the unbundled world, a totally clean share class is as transparent as it gets. It allows the investor to see exactly what they are paying for each element, which is clearly in the best interests of the client and end customer.

In my opinion, any discussions around how a clean share class will supposedly restrict client fund choice, is an attempt to introduce some grey into what should be black or white when acting in the best interests of the end investor.

In September last year, we made it known that we had approached fund groups about our desire to have a completely clean share class and the response has been overwhelmingly positive. Contrary to what a number of platforms have been saying, fund managers understand not only the inevitability of a clean share class world, but also the need to comply fully and unequivocally with the spirit of RDR, accepting that it won’t be cheap to do.

Many see clean share classes as the future – enabling them to support platforms and intermediaries in complying with demands for clear, transparent retail charging. The vast majority are even looking to launch a completely clean share class in the next few months.

Right now, fund managers are reviewing pricing across all of their distribution channels and this is where the competitive benefit of unbundled charging will become most apparent for the end-investor. At the end of the day, that is all that really matters.

Russell Lancaster is head of commercial at Cofunds.