How do companies get rebates from Fund providers?

bob_dob

Hi,
Lately i've been reading a lot about two things- The commission IFAs charge/receive on Pensions they recommend and the commissions paid by fund managers to 'investment platforms'.

On that latter, i see that certain firms/companies are able to get 100% rebates on the commission received from fund providers, even if they do keep 40% or so!

My question is how are they able to claim 100% back?? Surely if it has been paid then that's it??

dunstonh

My question is how are they able to claim 100% back?? Surely if it has been paid then that's it??

"unbundled" platforms charge explicitly and refund any commissions. So they refund the IFA trail commission and the platform commission but then charge you an amount for using their platform.

bundled platforms keep the platform commission and tend to keep some or all of the IFA trail commission (HL being an example of this).

The above only applies to platforms. It does not apply to insurance company pensions (where trail is either explicit or offset against commission built into the charges but not natural).