Unbundled charging paves way for ITs to list on all platforms

Ian Sayers, director general of the Association of Investment Companies (AIC), believes as Skandia, FundsNetwork and Cofunds move towards unbundled pricing models, investment trusts move one step closer to competing on a level playing field with OEICs.

Sayers said with trail stripped out, financial advisers no longer have an excuse to overlook the closed-ended space.

He added an unbundled pricing structure will allow the three major platforms to follow the likes of Transact in offering investment trusts to clients.

“Platforms have £164bn in assets under management but, shockingly, investment companies represent less than 0.5% due to the lack of access on the platforms,” said Sayers.

“However, I am confident the unbundled structure will allow the three major platforms to offer closed-ended vehicles that will bring the sector closer to the elusive level playing field with the open-ended universe.

“If the platforms were not offering an unbundled structure then it would have been impossible for the providers to offer investment trusts.”

Sayers added he believes post-RDR platforms will have assets in the region of £300bn. He anticipates the average platform will hold around 5% in investment trusts.

“Transact has 3% of its platform assets made up of investment companies and I expect, post-RDR, all the platforms will have in the region of 5%,” said Sayers.

“What is not clear is whether they will be selective over which trusts they choose or will offer the entire universe, but I am confident all the platforms will hold investment companies.”