AFH Group has from today scrapped platform fees for new clients.
It was back on 10 July when AFH first announced its intention to scrap fees.
CEO Alan Hudson today said the company would in future be absorbing the fees in full, with no increase in adviser charges to clients, no cut to adviser remuneration and no change to AFH’s investment proposition, or portfolio construction.
Existing AFH clients’ platform fees will be removed by 1 November 2018.
Hudson said: “Unlike ongoing adviser charges and active fund management, which add direct value to clients, platforms are a dead weight and only subtract from performance.
“The FCA’s recent report on the platform market study suggests price isn’t the primary reason advisers pick a particular platform; the service to the adviser is. That would be fine if the adviser was paying for it, but they aren’t.
“If advisers had to pay for platforms, they wouldn’t be as expensive as they are now.”
The firm explained that on average platforms charge around 0.3% (30bps) a year, which for a client with a £50,000 pension would add up to more than £12,500 over 25 years, slashing the final pot from almost £175,000 to just over £160,000 assuming 5% annual growth.
