Transparent funds with lower charges at The Share Centre

Richard Stone, chief executive elect at The Share Centre, sets out the new fair pricing structure for fund investors and calls for an end to percentage fees in the true spirit of the Retail Distribution Review (RDR).
 
"We support the FCA's drive for greater transparency and fairness in investor charges and aim to offer our customers a fee structure that underpins this.
 
"In the interest of investors we have taken decisive action ahead of the deadline set out by the RDR, which states that fund managers will no longer pay 'trail commission' to brokers. Going forward we will only be offering the clean class version of funds. Trail commission is taken as a percentage of the value of an investor's portfolio - affecting performance.  As clean funds do not include this, annual management charges are lower. This will lead to improved fund performance, all else being equal.
 
"Whilst other brokers look to replace the profit they will have made from trail commission by charging a ‘platform fee', which is typically a percentage of an investors fund portfolio, we won't be. We believe investors should not be penalised for investing in funds, especially as they are often an effective way for personal investors to diversify their portfolios.
 
"Historically, fund investors have suffered hidden charges taken as a percentage of their portfolios in the form of higher management charges, which are passed back to the broker. The FCA is making these charges explicit, but we want to go a step further and bring them to an end all together. We believe that our model provides real transparency to the retail investor, and is in keeping with the RDR's intentions."

For more information, visit share.com.