The Share Centre set to cut charges after FCA pricing pressure

The Share Centre is lowering its ongoing fund charges by 25 basis points after mounting regulatory pressure on price competitiveness.

In the FCA’s interim report on the asset management industry, The Share Centre and Hargreaves Lansdown were noted among the most expensive firms when considering total costs of services on a mid-risk rated portfolio.

But The Share Centre investment manager Sheridan Admans says costs look high because the firm employs active fund-of-funds which have higher charges associated with them due to costs of underlying investments.

However, he adds: “We recognise that cost is important and are working on reducing the headline OCF. We will be reducing this by a circa minimum 25bps later in the year.”

This change will be applied to the Positive, Cautious and Adventurous portfolios. 

A guide to direct-to-consumer platforms this month from consultancy The Lang Cat shows total cost at The Share Centre for a £50,000 portfolio is 1.94 per cent, while for Hargreaves it is 1.84 per cent.

But as already flagged to the FCA, The Lang Cat consulting director Mike Barrett says it is “unfair” to compare Hagreaves with The Share Centre as they serve different kind of customers.

Barrett says: “Hargreaves proved the market isn’t price sensitive. They are expensive but customers like them and are happy to pay more.

“The price reduction for The Share Centre makes sense. Their more sophisticated customers know what they are doing.”