Defined contribution (DC) platforms could provide a blueprint for pricing structures in the retail market, according to Fidelity.
Whilst the debate between bundled and unbundled pricing rages on in the retail space, Fidelity says lessons should be gleaned from the institutional market where both models co-exist harmoniously.
"Why are two parts of the market that are increasingly joining together in many other aspects now diverging when it comes to getting it right on pricing?" says head of platform sales & DC business Julian Webb.
Webb adds the provision of choice within the DC market has created a successful pricing structure and thinks this could provide a model template for platforms operating in the IFA space.
"A choice-based framework where both models co-exist could work in the retail context too - providing the kind of flexibility than can ultimately deliver the best propositions for customers."
Although both models exist within the DC space, Fidelity notes a shift towards the bundled option because its price is close to or at the same level as the underlying unbundled fee.
This contrasts with developments in the IFA space, where the momentum is towards unbundled pricing as a key part of the FSA's transparency drive.
But Webb thinks the provision of two pricing models within the IFA platform market does not run counter to the regulator's principles.
"As long as all pricing options are made fully transparent, platform users - whether retail or institutional - should be allowed to choose their preferred fee structures."
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