The recent announcement by HM Revenue & Customs (HMRC) on taxing rebates has reinvigorated the share class proliferation debate. Ben Cocks, director of financial services consultancy Altus, gives his view on what will happen next.
The arguments put forward say that because the likes of Skandia and Standard Life can no longer rely on a higher level of rebate to reflect their scale, they will require preferential share classes. With each platform requiring a share class preference commensurate with its scale the result will be a dozen or so share classes for each fund. Clearly, this isn't going to happen. It would be horribly confusing for customers, the rug would be pulled from under the nascent Retail Distribution Review (RDR) driven re-registration initiative and, most importantly, I don't hear anyone voluntee...
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