Skandia Launches Unbundled Share Classes With Rebates

Stephen Little

2 May 2013

Skandia, the UK investment platform of Old Mutual Wealth, is launching new unbundled share classes with lower annual management costs on its platform.

The new share classes will be referred to as unbundled, rather than clean, because they will continue to have a rebate where possible, which will be passed back in full to the client in the form of additional units, Skandia said in a statement.

The firm said focusing on unbundled share classes with lower annual management costs and rebates would minimise the tax liability for unwrapped investors.

According to research by Skandia, 87 per cent of clients on its platform had either an ISA or a pension and would be worse off if rebates were abolished.

"Adding unbundled share classes with lower annual management costs but still paying rebates where possible provides clients and advisors with a swift and positive solution to the new tax liability on rebates. By operating both unbundled and bundled share classes we will help keep re-registration simple without creating any unnecessary barriers for advisors and their clients," said Peter Mann, UK managing director at Skandia.

Skandia said it planned to move to clean share classes last month, following the decision by HM Revenue and Customs to tax rebates on consumers in March.

Last week, the Financial Conduct Authority confirmed that cash rebates on advised and non-advised platforms were prohibited.

However, the FCA said rebates from fund managers to platforms were allowed, provided this is passed on to consumers in full in the form of additional units.