Skandia returns fire as battle over fee disclosure heats up

Skandia has hit out at FundsNetwork’s decision to disclose its fees, suggesting the move was prompted by a desire to placate B2C investors.

Last week, FundsNetwork said full details of the fees it receives from fund management groups will be freely available on its website from 1 September. 

The move has put pressure on fellow fund supermarkets Skandia and Cofunds - also operating bundled charging structures - to follow suit.

Whilst FundsNetwork stressed the decision to disclose its fund manager rebates was taken in an effort to create a more transparent market, Skandia has suggested a "B2C issue" could be behind the move.

"One reason FundsNetwork has done this is because it is getting a lot of pressure from consumers to tell them what rebates they are getting so they know how expensive it is to buy from that platform," said Skandia investment expert Graham Bentley.

"That is a B2C issue - an issue which would impact on the likes of Hargreaves and so on because clients do not know what they are paying for."

He compared this situation to an "IFA only" operation like Skandia.

"Here IFAs basically know what they are getting - their trail and so on and so forth and it shouldn't actually matter to them, or the client for that matter, what margin we get."

But Dymott stressed FundsNetwork's move was in response to investor and adviser demand.

"We have seen an increase in demand for this information from both advisers and investors," he said. "Advisers want to understand the commercial arrangements to ensure there is no undue bias in how platforms operate.

"There has also been a strong drive from the regulator for advisers to understand the commercial terms of platforms."

Meanwhile Bentley revealed Skandia will fully disclose its fund manager rebates before implementation of the RDR upon completion of its "wrap pricing model".

But he said disclosing these rebates now could be detrimental for customers whom benefit from the fact Skandia receives higher rebates than most other platforms.

"The better the rebate we get now the better off customers will be," he said. "It strikes me some of our competitors would love to see our rebates published now so fund management groups could renegotiate in order to give less good terms to us."

He added nobody would benefit if Skandia "declared its hand" now.

Meanwhile Cofunds, which is also developing an unbundled pricing model, said it will not bring forward the announcement of that model because of Fidelity's move.