cofunds?

quisquis

Sorry if this is in the wrong place, can't find a better.
I have unit trusts registered with CommShare which means I get a bit of the annual renewal commission back. (It's not a fortune, last year I got £47)
Today a letter saying this cashback is now taxable and I should sign up to pay Commshare 0.24% on the entire fund. Their letter is extremely difficult to understand and it looks to me as if I shall end up paying out rather than receiving anything! They also talk about, but don't explain, something called a 'cofund' (which is a 'platform' - whatever that means).
Frankly I'd rather just pay the tax on the rebate to avoid all this confusion, but they say that's not an option. Anyone know owt about all this stuff?
thanks

dunstonh

They also talk about, but don't explain, something called a 'cofund' (which is a 'platform' - whatever that means).

Cofunds are the product provider. That is the investment platform you hold your investments on.

Frankly I'd rather just pay the tax on the rebate to avoid all this confusion, but they say that's not an option. Anyone know owt about all this stuff?

it is an option. However, you are using a non-advice service that isnt there to give you options or advice. You get what you are given when you use them. Commshare are not the provider. They are the agent (instead of an IFA).

dif

I also got this letter, and yes, it's very confusing and doesn't make clear what's happening. It looks like a move from giving a rebate to charging a fee, although this seems to have been imposed on them since their previous business model has been ruled out by Financial Conduct Authority - see Cash Rebates Ended by FCA on the Monevator site (it says here I'm not allowed to post a link).

My reaction was just to move everything to Hargreaves Lansdown. They have been so much easier to deal with than Commshare, although both will be subject to the new charging regime.

mike6265

I am also trying to work out what to do.
I have talked to them and understand if I do as they suggest I will be slightly better off. However I am reluctant to do this as I do not completely follow the reasoning.
I next need to check what will happen if I do nothing.
Anyone out there able to throw more light on this?

dunstonh

When you use an IFA, the IFA is required to give you advice and tell you what to do. You have chosen to not use an IFA but to DIY instead. So, like any DIY, it is your job to know what you should do.

If you need advice, then you should refer back to an IFA. A DIY provider is not required and is indeed not able to provide advice on options and terms. That falls under the remit of an adviser. All Commshare can do is present facts.

mike6265

Thanks dunstonh, I take your point.
However, this is to do with a large number of unit trusts bought a long time ago (in a PEP scheme then) with no advice. They still pay renewal commission (to someone) so as I bought them direct I have to use my DIY provider to reclaim this and share with me. The system has worked very well for the last 10 years or so.

dunstonh

However, this is to do with a large number of unit trusts bought a long time ago (in a PEP scheme then) with no advice. They still pay renewal commission (to someone) so as I bought them direct I have to use my DIY provider to reclaim this and share with me. The system has worked very well for the last 10 years or so.

The system has to change as platforms have been told to alter their pricing by the FCA. They have until 2014 to do it on new business and 2016 on legacy. It is up to the servicing agent (either the IFA or the company you use on DIY basis) to decide what they are doing and how they are doing it. Choice does exist but some of these DIY options remove that choice.