Standard Life is set to undertake an unprecedented bulk conversion of all investments in bundled share classes to their unbundled clean equivalent in November 2014.
Standard Life will carry out bulk conversions of clients remaining in unbundled structures to clean share classes at the lowest total expense ratio (TER) available, including any ‘super clean’ equivalents.
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By the end of 2013, the provider will no longer offer the bundled retail share classes to new or existing customers, except to facilitate re-registration.
The launch will be within the Financial Conduct Authority’s rule that all platforms must unbundle by 6 April 2014.
The Standard Life will move to the new structure in March 2014 and will show a clear fund cost, platform cost and adviser cost which will be rebate free.
In May 2013, Standard has agreed to pay all its customers’ platform rebate tax liabilities for 2013.
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By GlobalDataDavid Tiller, Standard Life head of platform propositions, said: "We are making a clean break by converting all funds on our platforms in bulk to unbundled share classes.
"We’re doing this ahead of the FCA deadline, as we did with RDR, so advisers can focus on adding value for clients rather than asking them to manage the tax liability, deal with platform legacy issues or coordinate a drip feed conversion process over the next 2 years.
"Given the tax liability on rebates will increase the cost of investing in bundled share classes, it was difficult for us to justify continuing to offer them on our platforms when a better option is available. The conversion is an unprecedented piece of work but worth the effort.
"We want to help advisers and clients move to unbundled share classes quickly and efficiently. In an increasingly cost-conscious market demanding both simplicity and transparency, this approach was the only option that made sense to us".
"The provider had been in discussions with fund managers and is confident all relevant funds will have clean options available in time for the deadline.
"We will be making advisers well aware of this in advance and they will make their own selection. We cannot control what fund managers do but we can make advisers fully aware of the circumstances so that they do something for their clients," Tiller added.
