Fund charges should be one of the last considerations for financial advisers when it comes to selecting the right platform, according to Defaqto, an independent financial research company.
According to Defaqto, platform and fund charges are only one element which financial advisers need to consider when selecting a platform, adding that arguably it should be one of the last considerations in the process as it is more important to get the right one for the client.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The company states that aside from looking at costs, advisers need to exercise rigid quantitative and qualitative analysis, taking into account factors such as financial strength, the investment vehicles and wrappers accepted on the platform and the service they are likely to experience.
At the end of April 2013, The Financial Conduct Authority confirmed that cash rebates will be banned from 6 April 2014 unless they are passed on to the client in full in the form of additional units.
Defaqto insight analyst for funds Fraser Donaldson said: "The cash rebate issue was the key remaining piece in the platform policy jigsaw and the FCA’s recently confirmed position on this will be welcomed by the industry – broadly speaking, it represents a sensible approach to dealing with this difficult issue."
"The final cost to the client needs to be looked at in terms of value for money, and not just pounds and pence. If a solution is more expensive but is more suitable for the client, a judgment has to be made about whether the extra expense is worth it," Donaldson said.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
