Home Investment Unit Trusts and ETFs Units Trusts - Platform Fees Not Catching On

Units Trusts - Platform Fees Not Catching On

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FundSuperMart (FSM) recently introduced a “Platform Fee”, which is effectively a wrap fee, on its customers. However, other fund distributors are not following suit.

Instead, distributors such as PhillipCapital appear to be actively targeting FSM’s existing clients by running the below print advertisement: “NO platform fees, NO transfer costs, Enjoy 0.75% sales charge on all equities funds till 30 Jun 2010”. The exception to the free transfer promotion applies to Pinebridge (former AIG) funds.


DollarDEX has also stated explicitly on its website that it has “no equivalent platform fees and no plans to introduce any”. It has an on-going policy of offering 1% sales charge permanently to clients and does not currently impose a transfer fee.

Trailer Fees the Motive

Yet, why would other fund distributors have an incentive to attract investors to transfer their funds? The answer lies in trailer fees, which are annual service fee that the manager of a unit trust pays to the person who sold the fund (or acted as the adviser) to the investor.

With such a competitive fund distribution landscape, it would be most interesting to see if FSM would soon backtrack from its decision to introduce a wrap fee.

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Last Updated ( Saturday, 15 May 2010 03:05 )  


+1 #1 starbugs 2010-05-09 10:07
The picture is hilarious!
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