UK financial services platform Cofunds will be launching its new pricing model with approximately 1,700 clean share classes available on “day one” from 85 fund groups.

These new share classes are a response to the implementation of the Retail Distribution Review from 1 January 2013 and are “clean” in terms of commission and platform administration charges.

For a typical actively managed fund with annual management fees of 1.5 per cent, the clean share class might charge 0.75 per cent to cover fund management costs. This reflects the removal of 0.25 per cent for platform administration and 0.5 per cent of advisor commission.

“For some fund groups the move to a clean share class has simply involved repurposing their institutional share class; even so, for all, it’s demonstrated a real support for simple, transparent charging and that’s got to be good for end investors. Importantly, it’s also good for advisors as it clearly defines each chargeable element of the value chain and in so doing should make it easier to explain the fee-based world to clients,” said Cofunds sales and marketing director Alastair Conway.

“The [regulatory] message … was clear: life is going to be easiest for those platforms, advisors and fund managers who embrace pricing in its simplest form. So this is an essential step towards enabling people to accurately assess the value of the service they’re receiving - resulting, one would hope, in a shift away from a preoccupation with knowing the price of a service without an appreciation of its value.”