Novia has agreed a tie-up with Winterflood Business Services to improve its ETF trading system and reduce costs.
The platform, which already offers ETFs, will use a new system from Winterflood for its trading in a bid to reduce costs, improve the ease of trading and boost ETF use among users.
The costs for the new service will be a 5 basis points initial charge and 2 basis points annual charge. For the first six months the minimum cost will be £1 and a maximum trading cost of £150, however after six months the minimum cost may rise to £5, depending on take-up of the new service.
The service will be launched in early December.
Bill Vasilieff, chief executive at Novia, says: “What we’re doing with Winterflood is when you’re on the system you can just pick funds and ETFs and box them up and aggregate them and trade direct with Winterflood. It is much more automated and much faster.”
“If you come to us you can pick funds and trade and for us ETFs are exactly the same as unit trusts and Oeics,” says Vasilieff.
The new tie-up will also see the cost of Novia’s Copia ETF model portfolios reduce, as the trading costs for them will drop.
Previously Novia used Stocktrade for its ETF trading, and will retain its services for other trading capabilities, but envisages most of its ETF trades will go through the new service.
Winterflood says it will roll out its ‘plug and play’ solution for other platforms, hoping to make ETF trading easier across the industry.
“One of the reasons that a number of advisers don’t use ETFs is that they don’t have access to them,” says Alex Kerry, head of Winterflood Business Services. “You can educate advisers as much as you want but if they have not got the materials or the ability it will not get far.”
“What we’re trying to do here is drive volume into ETF markets by offering a really low cost solution,” he says.
Previously platforms have been criticised for not offering ETF functionality, with many platform providers blaming the large technology investment needed to upgrade systems.
“We’re trying to package solutions so you don’t need to change everything. We’re going to give you a really neat solution you’re going to be able to use today,” says Kerry.
Winterflood already provides the service to FNZ clients, such as Axa, Zurich and Friends Life.