Investment platform axes trail commission ahead of FCA deadline

Around half (48%) of Rplan.co.uk’s clients were affected by the switch and 83% of these – or 40% of all the platform’s investors - are now better off as a result of the change, with an average saving of £27.64 per year.

The largest amount saved by a client is £265.78 a year. Over half (52%) of Rplan.co.uk’s clients were unaffected by the changes because they were invested in share classes introduced from March 2014 that already met the new requirements.

The bulk of the savings under the conversion are a result of fund managers taking lower investment charges on the new share classes, while a change to Rplan.co.uk’s fee structure also helps.

Switching off trail commission is the final stage of complying with the FCA’s requirement that all retail fund investors should be moved entirely into unbundled, ‘clean’ share classes that only include the charges paid to fund managers. Additional fees paid to financial advisers and platforms must be made explicit.

The platform is now urging all retail investors to lobby their own platforms if trail commission has yet to be discontinued on their own fund investments.

Stuart Dyer, Rplan.co.uk’s Chief Investment Officer, said:

“By instigating this change we are delivering significant savings for our customers. Investors should be contacting the platforms holding their assets to ask if the same has been done for them and if not, why not.

“Any platforms that have yet to discontinue trail commission should also be looking to do so as soon as possible in the interests of their clients. It is a complicated process but that is no excuse.”