Skandia drops annual management charges for Isas and MultiFund investments
Skandia has negotiated an exclusive deal with New Star to be the only fund supermarket to distribute its funds over the next nine months.
Skandia is also shortly to allow intermediaries to white label its supermarket in a similar fashion to services offered by Cofunds and Fidelity's FundsNetwork.
The addition of New Star to Skandia's range makes Skandia the only intermediary supermarket to feature all of the major fund providers.
In April 2002, New Star will review its position with Fidelity FundsNetwork and Cofunds, but for the next nine months will not be joining their ranks.
In linking to such an infant company as New Star, Skandia is setting a precedent for itself as previously it has only created links to companies with proven track records.
Phil Morse, marketing director at Skandia, said: 'Normally we would wait for a company to be up and running before linking to it. However, in the case of New Star, the management team and fund managers are already well known to us.'
At the same time, Skandia has announced it is dropping its annual management charge for Isa investments made this year and for investments of £10,000 or more.
The group is also increasing intermediary commissions to 3.5% plus 0.5% trail for those who use Skandia's online service.
Effective from 1 June, the 0% annual charge applies to MultIsa, MultiPep and MultiFund investments.
Previously, Skandia charged between 0.6% and 0.75% plus VAT as an annual charge of funds sold through its service.
Under the new scheme, there will be no annual charge for MultIsa contracts in the first year and in the second year.
If the Isa is topped up past £10,000, then the 0% will continue to apply. In all other cases, the Skandia annual charge has been cut by up to 0.25% to a flat rate of 0.5% plus VAT. Initial charges will continue to be 4.5% for Isas and funds while the discounted 3.5% initial charge for Skandia MutiPep is to be made permanent.
Annual management charges for the underlying funds purchased will continue to apply. On average, the annual management charges for the underlying funds are 1.58%.
Skandia has revamped its website offering and relaunched the product on 1 June, with the aim of offering greater functionality and ease of use for intermediaries.
Also on 1 June, the group started to accept Isa transfers, but only those that are paper-based. Skandia is hoping to be able to offer electronic transfers of Isas later in the year.
Electronic administration difficulties with partial Pep transfers has affected the offering by Skandia.
While it can offer partial Pep transfers into its products, it hopes to be able to offer partial Pep transfer out of its funds by October.
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