Advisers and investors are often fed up with the platforms they use and would like to switch to a new provider, but a major deterrent is the exit fees that some platforms charge. Along with the time it takes to make a switch, this can stop investors from ever making the change. It’s a point of concern for the Financial Conduct Authority (FCA), which raised exit fees in its Investment Platform Market Study.
Along with the time it takes to make a switch, this can stop investors from ever making the change. It’s a point of concern for the FCA, which raised exit fees in its Investment Platform Market Study.
For the first time, comparetheplatform.com enables investors to get real-time insight into the cost of switching platforms. It has launched an exit charge calculator to help advisers and investors understand the cost of leaving their current platform. It also shows any transfer incentives (eg exit fees being met or partially met) being offered by platforms.
Easy as 1, 2, 3
Step 1: Investors choose their current supplier and add detail on their wrappers and portfolios:
Step 2: Investors see charges and a list of platforms that offer the same investments with current transfer incentives:
Bella Caridade-Ferreira, Founder of comparetheplatform.com said “Platform exit charges can vary widely. Some make no charge at all and they should be commended. But some do levy some kind of charge. It could be for the whole portfolio, by wrapper or even a fee for each underlying investment. It pays to check how much a switch is going to cost you.”
“As well as calculating the exit fees, the calculator also lists any active transfer incentives with an example of typical annual administration charges. In the example above, Interactive Investor and Barclays Smart Investor have the same incentive, but the annual charges are very different.”
Caridade-Ferreira went on to say, “We help investors make well-informed choices by equipping them with the tools to make easy, accurate and dynamic comparisons.”
Download this press release here.
Photo by Matthew Feeney on Unsplash.