Skandia has justified its decision to introduce a £50 annual charge per client on the new Selestia Investment Solutions platform.
The platform combines the best of Selestia and Skandia MultiFUNDS but will be more expensive for existing Skandia users who currently do not pay an annual charge. Selestia users will benefit however as their annual charge for the platform will fall from £81.10 to £50.
Skandia says it believes the charge is justified as users of the new platform will benefit from a greatly enhanced proposition including access to 900 funds and a number of e-business services and investment tools.
Billy Mackay, Skandia UK head of marketing, comments: “ Had we not introduced something new and the new platform had been like for like with MultiFUNDS then it would be different but we are offering advisers a single integrated proposition with all the extra features for less than a pound a week per client.”
He adds Selestia Investment Solutions, which will launch on 30 July, will combine Selestia’s strong front-end capability with Skandia’s back-end proposition including its comprehensive review tools and bulk client switching facilities.
Other charges for the platform include a standard initial charge for new business of 5%. For users of Skandia MultiFUNDS, the existing investor charge of 0.5% for clients with investments under £10,000 is being removed. There are a number of flexible remuneration options supporting both commission and fee based models.
The new Skandia MultiFUNDS charges will come into effect when customers are migrated onto Selestia Investment Solutions in February 2008. Until then they can choose to stay with MultiFUNDS or move to the new platform. Switching to the new platform is free.
Have Your Say
Quite frankly this extra charge to Skandia clients is unwelcome. Skandia is already benefitting from the funds under management and now they want to take even more money from my clients (and me)! I will wait and see what these extra benefits amount to, but if they do not impress I will be moving my clients away. That will be a great pity as I have a great regard for what Skandia has offered in the Multi-Manager marketplace. They pioneered the Fund Supermarket concept and I am grateful for that. However, what they will gain on the swings with this extra charge they will lose on the roundabouts, in my opinion. Yet another example of a Product Provider not looking further than the whats in their wallets. The question is "Is this treating clients fairly"?
Jeremy Newbegin is director at The Ethical Partnership
Just read your article re the new Selestia Investment Solutions. You may be interested to note that although the annual charge for Selestia investors is reducing to £50 the initial charge (net of introducer commission) is increasing from 1% to 1.5%. Quite an increase don’t you think? No doubt you will quiz them on this and report back incisively (sorry!) to us all!!
Alan Bishop is an IFA at LifeInvest Limited
Admittedly, if clients object to the new Skandia charges they can transfer their investments elsewhere. However such a transfer will almost certainly entail additional costs. Given these significant changes in terms, in order to treat customers fairly Skandia must now also offer the facility to re-register funds away from their platform. In that way customers and their advisers can decide for themselves whether these new charges and facilities represent value for money. So come on Skandia, show the courage of your convictions.
Simon Kearney, Certified Financial Planner
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