Charles Stanley Joins Platform Price War

Stephen Little

4 February 2014

, revealed new pricing structures in response to the Retail Distribution Review reforms.

The firm is waiving its 0.25 per cent platform and custody fee charges for new clients or those transferring from another platform until October 2014, as long as the balance is £500,000 (£815,200) or greater, it said in a statement.

The deal applies to anyone investing money in ISAs, SIPPs, on non-tax wrapped investments with Charles Stanley Direct before 1 April. Charles Stanley said it will waive exit charges if any client was not satisfied with the service and wished to transfer to another provider in the first year.

"Many clients have expressed an interest in using our service, but some have been put off by high transfer fees from competitors. Our six month fee free offer helps offset the cost of moving. In addition, we will guarantee that if any client isn’t satisfied with our service and wishes to transfer to another provider in the first year, we will waive any exit charges,” said Rob Hudson, head of Charles Stanley Direct.

Price war
As a result of the RDR's ban on trail commission, many platform providers have announced new charges as they move to the new model, which does not include commissions, fees, or rebates, ahead of the April deadline.

CS Direct has undercut Hargreaves Lansdown which last month announced charges of 0.45 per cent for clients up to £250,000, falling to 0.35 per cent from £250,000 up to £1 million. Other platforms that have lowered their fees include Fidelity, which is introducing a 0.35 per cent platform fee for clients with up to £250,000, while Barclays Stockbrokers will charge a fund administration fee of 0.35 per cent per annum for clients with assets up to £500,000, with no further fund charges above this amount.

CS Direct said that recent rash of announcements from platform providers with clean priced charging structures highlighted the disparity and complexity for investors and warned that while many of the reductions looked enticing, some offers were not as good as they first appeared.

“The recent pricing announcements from many competitors are welcome, although in our view many have been dithering and are long overdue. Investors finally have clarity on charges, although comparing like for like still isn’t easy. Differences in what platforms offer will be a key differentiator and it still seems strange that many don’t offer clients the choice of shares and investment trusts alongside funds," said Hudson.

In April last year, the Financial Conduct Authority, the UK regulator, said cash rebates will be banned from 6 April 2014 for new clients and until April 2016 for existing customers. After these dates a more transparent pricing model will be implemented, where platform charges will be disclosed to and agreed by investors. These changes were brought in by the FCA so that clients would be able to make more informed choices and understand what they were paying for.