How do you annoy a wealth manager?

Question; how do you annoy a wealth manager?

Answer; ask him about his fund supermarket.

fund supermarket


It may offend your local wealth manager (aka IFA) but that’s what Reuters call these funds platforms the FCA are investigating and if you believe Platforum, most customers (oops clients) asked what a platform was for, replied to get access to funds at knock down prices- avoiding the IFA in the process.

FCA platform model 2

“Paying less in fees than using a professional adviser”

People seem to see Fund Supermarkets as being on their side in getting a good deal on funds.


AJ Bell are campaigning to offer advisers the right to rebates of fund management fees rather than receive lower prices for funds as platform managers. This surprised me as I assumed that the economics of aggregation were dependent on economies of scale. Platforms with billions under management should be best plnaced to drive down price but (according to Hugo T and Stanley Kirk- this is not the case)

Independent platforms (not vertically integrated or ‘closet integrated’) can’t get a better deal for the end client if they have no influence over the funds flow…..The number of advisers or DFMs who choose that fund is independent of the platform so why would a fund manager allow access to a lower shareclass however large the funds on the platform? That’s what the FCA are going to find out after their studies

This sounds like a classic case of divide and rule; fund managers don’t like giving blanket discounts and were platform managers absolved of responsibility to negotiate price then advisers would have a fat wedge of cash to rebate against upfront fees. We would only be an inch from commission again with fund managers able to jack up fees and  offer massive cash discounts so that the adviser can advise for free.

If the FCA are serious about helping the consumer to win, we have to curb the  power of the advisers to manipulate rebates in their favour. We all now how food supermarkets have been required to make pricing clearer, perhaps the real reason wealth managers hate the term “fund supermarket” is that it reminds customers (oops Clients) about the importance of price.

fund supermarket 2



About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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3 Responses to How do you annoy a wealth manager?

  1. Brian Gannon says:

    What are you talking About? Have you missed the abolition of fund rebates and development of clean share prices? Do you actually understand that advisers charge their fees explicitly and must disclose them? Maybe the vertical integrated companies such as SJP might be able to do what you say but adviser charges are explicit and separate.

  2. henry tapper says:

    Re-read the blog Brian and you will see i totally agree with your position

  3. Robert Davies says:

    The FCA seems to have completely overlooked the role of tax wrappers in the growth of platform use. That is a big oversight and a question that should be asked..

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