iii introducing quarterly £20 charge

koru

Perelandra wrote: »

Interesting... a few months ago when I was comparing the different options, I'm sure that the rebates that AT were giving were 0.25% higher than most of the rebates on their pdf now, so potentially the platform rebate has been removed...

I did print off their form then, but sadly I've probably shredded it by now, so I can't be sure if my recollection is correct or not!

Don't suppose anyone else can verify?

I happen to have a hard copy of their list of funds for December 2009. I have checked all the fund houses which, back then, had rebates of more than 0.5% on a significant number of their funds. (Aberdeen, Aviva, Cazenove, HSBC, Hendersons, Insight, Investec, Jupiter, M & G, Martin Currie, Old Mutual, Standard Life.) I'm assuming that fund houses that do not have rebates of more than 0.5% probably don't include any platform rebate.

In every case, ATS is offering the same rebate now. So, unless they added extra platform rebate since 2009 and have recently removed it, I think your recollection is wrong.

koru

dunstonh wrote: »

For the fund investors on this thread, one indicator of whether the platform is unbundled is to look to see if they offer non commission paying versions of the funds. e.g. the Schroder class Z funds. These have no trail commission and no platform commission. They are typically 0.75% AMC compared to the retail class which is 1.50%. Unbundled platforms may well offer both (as it makes no difference if they are rebating it anyway). Bundled platforms will only offer the 1.5% retail.

Neither ATS nor iii seem to have Schroder funds with 0.75% AMC. ATS has a net AMC after rebate of 1.0% (on actively-managed equity funds) and iii has a net AMC of 0.86%.

I assume you are seeing these clean fund classes appearing on the platforms aimed at IFAs, such as Transact? It will be interesting to see if the likes of iii and ATS transition to these new classes. iii has just switched to the rebate model, so perhaps their range of funds is still geared to a business model under which they pocket the commission. ATS has less of an excuse. They have happily sold some non-commission investments (such as Troy Trojan O, Vanguard index funds, and any shares) for ages, so they have had plenty time.

dunstonh

Neither ATS nor iii seem to have Schroder funds with 0.75% AMC. ATS has a net AMC after rebate of 1.0% (on actively-managed equity funds) and iii has a net AMC of 0.86%.

Ok. That is good info. It means that ATS is keeping the hidden commissions and are effectively a bundled offering. They are only rebating natural trail but keeping the platform commission. iii has moved to unbundled and is rebating natural trail and platform commission and then charging explicitly in its place.

You find most unbundled platforms use the TER rather than the AMC. So, looking at TER here and comparing with other unbundled platforms, the class A/retail version of the funds have net effective TERs in the range of 0.8% (net effective AMC being 0.75%).

I assume you are seeing these clean fund classes appearing on the platforms aimed at IFAs, such as Transact?

Yes. But they are available to any platform. I just checked my preferred unbundled platform and some of the Schroder class Z are on there but not all. However, checking the rebates on the class A and the net outcome is the same (as you would expect). There is no reason why iii would not offer them in future for example as they are geared for the unbundled platform. However, the outcome is the same if they are rebating or offering clean.

What is clear though is that ATS will have to change it's charging structure post platform review if the platform review ends up as currently planned. It may have to do it earlier if fund houses only offer totally clean funds post RDR. Invesco, for example, have not gone totally clean. They have gone non-trail. They still bundle the platform commission. So, fund houses are split on this as well.

koru

dunstonh wrote: »

Ok. That is good info. It means that ATS is keeping the hidden commissions and are effectively a bundled offering. They are only rebating natural trail but keeping the platform commission. iii has moved to unbundled and is rebating natural trail and platform commission and then charging explicitly in its place.

And yet ATS offers a rebate of 0.85% on Aberdeen funds like Asia Pacific, which I assume can't be just trail? And they offer the Vanguard index funds, which certainly don't pay trail and either don't pay any platform commission or, at best, can't be paying more than a few basis points of platform commission, given that their total AMC is usually only 0.25%. I wonder if Troy Trojan O pays any trail?

It looks to me as if ATS is a funny mix at present.

Perelandra

koru wrote: »

In every case, ATS is offering the same rebate now. So, unless they added extra platform rebate since 2009 and have recently removed it, I think your recollection is wrong.

Very strange indeed, but your hard copy is better evidence than my fuzzy memory.

dunstonh

koru wrote: »

And yet ATS offers a rebate of 0.85% on Aberdeen funds like Asia Pacific, which I assume can't be just trail? And they offer the Vanguard index funds, which certainly don't pay trail and either don't pay any platform commission or, at best, can't be paying more than a few basis points of platform commission, given that their total AMC is usually only 0.25%. I wonder if Troy Trojan O pays any trail?

It looks to me as if ATS is a funny mix at present.

Trojan O pays no hidden rebates.

Most bundled platforms offered loss leaders (like many retail outlets). Their hope is that whilst some are unprofitable, it allows them to advertise they are cheap and when people sign up, most wont buy exclusively cheap investments but also include the ones that pay the commissions in their portfolio.

It does seem a bit mix and match though based on what you have found.

sabretoothtigger

Is AMC or TER more important to take notice of

koru

TechnoBadger wrote: »

Andy Bell of Sippdeal has indicated that they have no plans in he pipeline to start charging (posting on The Motley Fool forums.)

Can anyone provide a link to this statement? I have tried searching on TMF, but no luck.

Optimist

koru wrote: »

Can anyone provide a link to this statement? I have tried searching on TMF, but no luck.

I believe this it what you are looking for.

dunstonh

Is AMC or TER more important to take notice of

Like for like is most important.

Andy Bell of Sippdeal has indicated that they have no plans in he pipeline to start charging

If they are not being paid by the fund house and there is no IFA trail to keep and they are not charging consumers then where will their earnings be?