Why are Platform Fees for ETF's often capped at much lower prices than Unit Trusts/Oeics?

Superscrooge

Why are Platform Fees for ETF's often capped at much lower prices than Unit Trusts/Oeics?
eg. Fidelity charge 0.35% or 0.2% platform fee (depending on amount invested) for most investments. But only charge a maximum of £45 for ETF's.
Could someone explain why platform fees for holding ETF's are often so much lower? 
Thanks

SonOf

The whole point of the RDR was to remove the cost of distribution from various investments which should have given a level playing field with no bundling. i.e. everything unbundled.
However, a couple of platforms decided to keep a different charging structure.   Which they are allowed to do.  Even if some of us think that is isn't really in the spirit of the RDR.     They probably have commercial reasons.     Maybe a loss leader.   Maybe they earn sufficient brokerage fees to make up the difference.   Maybe they have enough enough in place to cover the costs and would risk too much by aligning all assets under the same charge.    Nobody will really know their commercial reasons for doing it and they are almost certainly not going to tell us.   We can only make guesses.

Audaxer

I think for most platforms it is the same for Investment Trusts and individual company shares as ETFs, but you are paying for each trade, whereas a lot of platforms have no trading fees or minimal trading fees for funds. 

Thrugelmir

Different products, different administration requirements. Consequently different costs. 

John464

Because people will pay them.
What I don't understand is why - when the likes of iweb and x-o are free

Albermarle

This question has been asked a few times before . One conclusion is that the three that offer these capped rates ( HL, Fidelity, AJ Bell) are all % charging platforms . A savvy price aware large investor would normally move away from a % based  platform to a fixed price one . This special deal for ETF's and IT's could keep them on board. Even if the business was not really profitable they probably see it as better than losing customers to competitors, and one day these customers might introduce a family member , pay for financial advice etc. 
An average/typical investor is only invested in funds so overall it probably does not cost that much. 

dont_look_now

I think a lot of it is historic, i.e. people are used to percentage charging for funds, but not for shares.

I doubt that those platforms are not making money from shares, though they may be making less from shares than they do from funds. Mainly because a lot of investors spend more on dealing commissions than we might think. We might just buy an ETF or IT and hold it for years, but not everybody is like that. Indeed, perhaps we're not like that either, because next year we will have switched to a different ETF or IT after reading some new research on the benefits of currency hedging / factor investing / some active investing strategy, incurring 2 more dealing commissions. Of course, those are just one-off commissions, at a flat rate, not a percentage, so we don't resent paying them. But they may add up to just as much as a percentage holding charge would come to.