FundsNetwork reveals fund manager rebates

Fidelity FundsNetwork is disclosing its fund manager fees as it looks to create a more transparent market and prove its pricing policy is free from commercial bias.

It said full details of the fees it receives from fund management groups for each share class of fund available, in addition to information on its pricing policy, will be freely available on its website from September 1.

Its standard platform fee is 0.25% and over 90% of the funds currently available on FundsNetwork a carry a fee of 0.25% or less. The platform said in a limited number of cases (less than 0.5% of all funds) where funds do not pay commission, the platform fee may be above the typical rate card of 0.25%.

The platform's rate card is driven by fund AMC - for example, if a fund has an AMC of 1.50%, typically the asset management fee is 0.75%, the platform Fee is 0.25% and adviser commission 0.5%.

When the AMC is higher than 1.50% it may retain more than 0.25% and for funds with AMCs lower than 1% it typically discounts the platform fee back to as low as 0.10%.

FundsNetwork said its average platform is 0.2495%. In other words, for every £10,000 invested, the platform receives £24.95 each year from the fund manager for servicing a portfolio.

Each fund manager is also charged a fee for listing a fund on FundsNetwork. This is charged at a rate of £600 per fund.

This information was previously available on request but now advisers and clients will be able to view online exactly how much of their annual management charge is paid to the platform in what FundsNetwork said is a UK first.

The platform's move follows publication of last month's platform policy paper in which the regulator said it will delay a ban on fund manager rebates - originally proposed in its March 2010 discussion paper - pending more research.

It said a ban on fund manager rebates, in addition to cash rebates, will not come into effect until after implementation of the retail distribution review (RDR) - something which has triggered fears of an "RDR 2".

But the FSA also said it will look to enforce consistent disclosure of platform fees and remuneration when RDR is implemented.

Fidelity head of commercial Ed Dymott (pictured) said FundsNetwork saw no reason to delay such disclosures until after 2012.

"We want to reassure our customers our pricing policy has a standard approach with no commercial bias," he said. "We aim to treat and present all fund groups in the same way."

Dymott added the platform does not think a ban on fund manager rebates is necessary.