Unbogling

Unless charges are unbundled the IFA doesn't fully know what they are. We looked at the Standard Life Platform and found that Standard couldn't answer some of our questions on charges, discounts, rebates and which party to the arrangement paid or received what. So we went for Nucleus which we found to be the most transparent (and the cheapest)

Posted by: graham worrall

THe FSA don't understand...

I can see both sides of the arguement here (and of course there has to be two sides) however I can see absolutely no benefit in unbundling charges and the complexities that will create for clients (and advisers). We use the SIS platform with nominated trail/ongoing fee and have done so for some time. This we find very straightforward to explain to clients as we quote the net AMC of the fund (i.e. after deducting standard trail commission), the fund's additional expenses and the funds (net) TER. To this we then ADD our annual servicing charge. I personally have no interest in how much of the remaining AMC SIS receive from each fund group and neither do any of my clients. From an RDR point of view, we take the same initial and annual charge irrespective of tax wrapper, asset type or fund, so there is absolutely no possible financial bias between, cash, bonds, trackers or active management... As the meerkat says "simples!" What benefit would a client derive from me having to break down each fund being used to show the AMC kept by the fund house and that passed to SIS? In a word: NONE The overall charges would be the same and the resultant fund performance would be the same.

Posted by: You must be joking

Unconfused

The FSA sadly would not see the charges if the subject were naked, let alone transparent. The real issue is whether the client is receiving service and fair treatment at a fair price. The FSA must recognise that poor and/or costly service loses clients. It must therefore allow intermediaries (trust is not a word in their glossary) to do their job and decide which is the best platform for their client base. The FSA should monitor results. Like buying cheese, nobody wants to know the price of every cheese,clients know that some is better and some is cheaper but in the end they will make the decision as to what is value. Say cheese FSA and you will be happy!

Posted by: Andrew Moore

FINANCIAL SHAMBLES ASSOCIATION

In years gone by, we have been told to give clients a raft of paperwork and information, then we apparently gave them too little, then too much again. Fact-finds used to change like people change their underwear - and then of course disclosure in 1995, and a whole load more info, plus hand-written illustrations (Pru) and now we are talking about 'un-bundling'. The clients are only interested in the total cost and what they get for their money. I give them the cost of the product and the cost of the advice. That's it. With reference to the article on this website, perhaps people would be more interested in the transparency or the 'un-bundling' of the EXPENSES claimed by the FSA?.

Posted by: Keith Jayne

re you must be joking 17.06 21/1/10

"I personally have no interest in how much of the remaining AMC SIS receive from each fund group and neither do any of my clients". By "having no interest" in the full picture (because rebates to SIS are probably available to the client elsewhere), you are potentially denying finding your clients a cheaper way of holding the same generic wrappers and the same portfolios - surely one of the functions as an independent adviser IS to take your client's TOTAL costs into account? By using SIS all the time, you may be missing out on reducing your clients costs. If you have another reason for advising a higher cost option thats fine if it's worth it, but surely you have to know the differences to determine whether the other factors ARE worth it??

Posted by: Paul Harding

Charge Comparison is easy

Charge Comparison is easy...for professionals. It doesn't matter how complicated the charge structure, the effect on the client can be easily quantified and totalled as a single number for comparison - the RIY. This will vary not only between platforms but also substantially between clients depending on how the platform is used - which is why independent advise is needed. Unbundled pricing is essential in the advised market so that competition pressure can be brought to bear on the component parts, by the adviser. Bundled pricing also has a market, for the unadvised and direct BtoC business.

Posted by: Stan Kirk