Standard Life is changing the fee structure of its Wrap platform, reducing and simplifying charges for clients and launching a new ‘Drawdown Price Lock’.
The reduction in Wrap’s rate card is designed to make a real difference to existing customers. The focus has been on delivering a sustainable fee structure that rewards advisers’ core clients, which means addressing the cost challenge facing clients approaching and entering retirement.
A brand new option, designed to meet the needs of clients in retirement, is the introduction of a ‘Drawdown Price Lock’; the first of its kind in the UK. In a departure from traditional platform fee structures where the fee rate steps up as a client’s pension pot reduces, this innovation ensures the platform charge clients pay on their pension savings can be locked at its lowest level for life.
This gives advisers the control to lock in charges when they and their clients choose, giving certainty of outcome and resulting in potentially large savings for individuals throughout their retirement when compared to traditional charging models.
In recognition of increased numbers of adviser’s clients consolidating in the run up to retirement, as well as the revised tiered pricing, there is also a new option to set a 15 bps flat fee for clients with more than £1m.
The pricing updates will see the number of pricing tiers reducing from six to four and will come into effect in April 2020. It will be available to both new and existing clients.
New Wrap platform pricing
|Platform Eligible Assets||Platform Charge|
|£0 to £249,999.99||0.35%|
|£250,000 to £749,999.99||0.25%|
|£750,000 to £999,999.99||0.15%|
SIPP product fee
|Adviser <£75m||Adviser £75m+|
Current Wrap Pricing
|Platform Eligible Assets||Standard||Core|
|£0 to £99,999.99||0.40%||0.55%||0.40%||0.45%|
|£100,000 to £249,999.99||0.35%||0.50%||0.35%||0.40%|
|£250,000 to £499,999.99||0.30%||0.45%||0.30%||0.35%|
|£500,000 to £749,999.99||0.25%||0.40%||0.25%||0.30%|
|£750,000 to £999,999.99||0.15%||0.30%||0.15%||0.20%|
Noel Butwell, CEO of Standard Life Savings Ltd said: “We take a long term view on our pricing, ensuring fees are set at a sustainable level that aligns our interests with our adviser partners and their clients.
“This is why, as we see the impact of Pension Freedoms emerging through an ever increasing proportion of clients taking income drawdown, we focused hard on ensuring our new fees addressed the challenges faced by these clients in retirement.
“The pricing review is as a result of continued growth and efficiencies we’ve generated across our platform business and means we’re able to pass on savings in the form of reduced prices for advisers and their clients. Advisers that use Wrap can be confident our new fee structure means they can deliver great value for life for clients consolidating and entering drawdown.
“We also wanted to go further, which is why we introduced the Drawdown Price Lock. Most platforms, including Wrap, have traditionally operated a model designed to reward savers where fees fall as the client’s pot increases. Unfortunately, this means as clients start to use their savings to fund their retirement, that percentage goes back up as money is withdrawn creating an increasing drag as their pot declines.
“From April 2020, advisers can prevent this happening by ‘locking in’ the fee their clients pay when their percentage rate is at its lowest level. That way, those who invest with Wrap will benefit from lower fees all the way through retirement, and not just at outset.”
Wrap is Defaqto 5 Star and Gold Service rated and was voted by advisers as both the Best Platform Provider (AUA over £25bn) and the Intelliflo best platform service at Schroder’s Platform Awards 2019. It is also the only platform to have been AKG A rated for financial strength two years in a row.
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Notes to editors
About Standard Life
*30th June 2019
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