Discretionary fund managers (DFMs) have expressed scepticism at Skandia's claim its fund panel will be able to compete with them on price.
Last week, Old Mutual Wealth CEO Paul Feeney said the firm's Select range, that offers around 50 funds from 12 managers, would challenge DFMs with "prices they cannot match".
"It will put us in competition, on our terms, with private client wealth managers," he said.
But Richard Leigh (pictured), founder of wealth manager London & Capital (L&C), said it was unlikely Select would be able to compete with its DFM offering, priced at 25bps plus VAT.
"[New entrants] try to grab market share by reducing costs and then, when they grab market share, they will start to put the prices [back] up," he said. "They are working at a loss leader on a timeline, and hope that by the end people will have left the market and they will be able to put their prices up."
A range of 12 fund managers was "very restricted", he said, and left Skandia unable to react to market changes.
"One L&C model came out as a recommendation from an IFA: it took seven days to make. I can't see that happening at somewhere like Skandia or Axa: they are oil tankers.
"They have to bring something out to satisfy the market. It's not competition for us at all."
Caring for children and elderly relatives
Similar to June 2007
Square Mile’s series of informal interviews
Fine reduced to £60,000
Two roles created