Platform pricing remains more frosty than transparent, particularly when it comes to some pensions, warns Terry Huddart of Nucleus...
So, here we are in the future. After several years of conjecture, debate and hard work, the Retail Distribution Review (RDR) is a reality. Some will feel more immediately affected than others and, for advisory firms, the level of impact will vary considerably depending on what their business model was previously.
Various stats have already been published. For example, 98% of Tenet advisers will be staying independent, 10% of advisers will apparently leave the industry, or 43 million people will be pushed into the advice gap.
These early figures are interesting but I think it is going to take time for everything to settle down and you do not need me to tell you the famous quote about statistics.
Why platform pricing remains more frosty than transparent...
But, as we battle through the last cold days of winter, and there are new ways of working for everyone to get used to, it can be easy to forget that the RDR has heralded a really positive change for consumers.
One area where it is starting to do what it said on the tin is improving the pricing transparency of investment products. The platform sector is a case in point; it is now relatively easy to create a one-page comparison of platform charges by wrapper type at each different price point.
It used to be much harder and contained too many ifs and buts because of the greater prevalence of opaque bundled charging models. So, progress has been made and the legislation is clearly bringing about a market reality.
However, platforms providing such nice and digestible round numbers do carry a danger; it can be a bit of a ‘watch the rabbit’ exercise. You still need to dig about a bit and additional costs associated with pensions are one of the main culprits.
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