This chart provides a simple overview of how the amended Cofunds pricing impacts its relative position against peers. We have modelled Cofunds against a number of platforms which we typically hear advisers consider alongside the L&G-owned platform.
No, these charts aren’t perfect; and yes they reflect some substantial built-in assumptions. But what they do illustrate is that Cofunds has become more competitive for smaller accounts where previously the fixed fee element made them look uncompetitive.
Possibly more interesting is how we again see platform pricing converging – to a point where it’s often a differential of 10bps between top and bottom. This is interesting when assessed against the sometimes blasé attitude towards clean share classes where this 10bps difference is shrugged off by some. It also confirms how much keener platform pricing has become. £40 is not much more than some clients would spend on petrol driving to and from an IFA appointment (well OK if you live in the Shetlands but you get the point... and rich people do tend to drive gas guzzlers) but look at the difference the removal of £3.33 per month makes to a platform’s relative pricing.
Fear not detail junkies. We will pick up on all the detail including interest on cash, tax wrapper costs, transaction costs and all that fun stuff in our upcoming Platform Pricing Guide which will be made available free of charge to IFAs from 23rd October 2013.
Click on the graph for a larger version.