Platform charges stay flat with Cofunds among cheapest

Money-Coins-Pound-Currency-Close-up-700x450.jpgThe adviser platform market grew by 25.4 per cent in the 12 months to 30 June 2017, but average charges have remained flat.

According to research from Platforum, the average charge for a £100,000 portfolio in that period was 0.41 per cent, compared to 0.40 per cent in 2016. The average charge for a £500,000 portfolio was 0.29 per cent, the same as 2016.

Cofunds was the cheapest platform for £100,000 portfolios at 0.29 per cent followed by Ascentric, Aviva, Fundsnetwork, Parmenion and Raymond James which all charge 0.30 per cent.

Market newcomer Hubwise is also one of the cheapest for this portfolio size with a charge of 0.31 per cent.

Parmenion last week announced it was removing initial fees and initial dealing charges for new business and top-ups from 1 November.

In May, Ascentric moved to a single account charge, ditching trading fees and charges for Sipp and drawdown administration.

For £500,000 portfolios, Hubwise is the cheapest with a 0.12 per cent charge followed by Alliance Trust Savings which charges 0.13 per cent.

Platforum also plotted scores for value for fees and found that while 7IM and Transact have relatively high charges they are perceived by advisers as being good value for the fees.

Aviva, AJ Bell Investcentre, ATS and Parmenion are all at the cheaper end of the scale and are also perceived as offering good value.

Platforum research associate Andrew Ashwood says: “The largest platforms are in the strongest position to implement disruptive price changes – we see increased scale acting as an enabler of bringing down charges for the end customer. However, many of the scale players will have to recoup the costs of expensive technology upgrades so may be limited in their ability to bring charges down in the next 18 months.”

He adds: “The average advisory firm holds 40 per cent more of their assets on their primary platform than on their secondary platform, so this presents a massive opportunity for platforms to move their secondary and tertiary users up the value chain. We expect basis points to be shaved off for portfolio sizes above £200,000 to capture a greater share of wallet.”