Novia, a UK-based provider of wealth management platform, has said that it will cut all cash rebates on new and legacy business from April 2014.
From October, the platform will begin to automatically convert retail share class funds to its equivalent clean share class where the clean share class is no more expensive than the current share class.
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Novia said there will be no charge to the Advisers or to their clients for the conversion and no paperwork is required.
The company added that the payment of rebates will end from 6 April next year, even on funds where there is no clean share class available.
Unit rebates, which will be allowed to continue although rebates from unwrapped investments, will be subject to a 20% tax charge, the company said in its press release.
Novia chief executive, Bill Vasilieff, said: "The recent FCA consultation paper CP13/9 does not change our views in any way. We are very keen that our advisers and their clients avoid the potentially very confusing middle ground of some shares having rebates and some not and even some that had rebates no longer having them due to a disturbance event."
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By GlobalData"We have seen considerable inconsistency in the market when it comes to share class offerings, with some fund groups proposing to offer clean shares across the board, some only providing them on Income or Accumulation units and others offering no clean share classes at all but rather creating new share classes altogether.
"Novia platform not only will it be a seamless and paperless process but it will also ensure these conversions are not subject to a potential CGT liability," Vasilieff added.
Vasilieff said it was the responsibility of fund managers to ensure their clean share class funds were not more expensive than the rebated versions.
