Extra lang cat points if you can identify the source of the quote in the title.
OK, so just a quick blogette on Ascentric’s price change which hit the press today. Before I get going, I should disclose that we work with Ascentric on some PR stuff, so I’m conflicted and all that. If you don’t want to read basic arithmetic jottings as a result because you think it will be FAKE NEWS, then please click here.
I used to give the nice folks at Ascentric a hard time for the complexity of their charging structure; in fact back in the early days of the lang cat I gave them a ‘complexification’ award because their charges were the hardest to sort out of just about anyone.
A wee while ago it launched an all-in charging structure which was better, but left a few boxes unticked. The wheel has now come full circle and we have a full, proper all-in structure.
The headline charge is 0.3%, which is sharp enough to show reasonably well without getting in and among the price leaders for larger portfolios (this is all subject to some stuff about trading, which I’ll cover in a moment). There’s a minimum charge of £180pa which only hits you below £60k, so well below what most advisers are placing on platforms. The 0.3% is flat up to £1m and then tiers away.
What’s unusual about this is that it’s not just flat across wrappers – which is unusual enough – but also across asset types. The only other people to do this are 7IM and Alliance Trust Savings in its IFO structure. Both of those, however, have differential charges for SIPP (in 7IM’s case this is because it doesn’t have its own SIPP yet). That leaves Ascentric as the only genuinely all-in provider in the market.
Is that a claim to fame worth having? Is it a deal, a steal, the sale of the f***in’ century? If we look backward, maybe not. I don’t know what proportion of IFA-controlled assets are in exchange traded securities which normally attract trading charges, but it’s not high. But if we posit that trading charges have been an inhibitor of ETF, investment trust and other ETP usage, then this is welcome.
Let’s do some heatmaps, because what else are we here for?
ISA first – no trading charges included.
So that’s a decent showing – not as cheap as the fixed fees lot but certainly not far off the market at or around the £100k – £150k mark.
SIPP next – again, with no trading fees:
A bit sharper here, reflecting the fact that lots of providers still up their charges a little for SIPP because of the emotional trauma of collecting tax relief or something.
And finally, let’s look at an MPS scenario with quarterly rebalancing of a 20-asset portfolio:
This is stronger again – Ascentric works very nicely here in the £100k to £500k space. This is all down to multi-wrapper and multi-asset agnosticism, if you know what I mean, which you probably don’t, but that’s OK. We’re together, and that’s what counts.
All these scenarios miss out the biggest strength of this new price strategy – no trading charges on ITs, ETFs and so on. If we did some scenarios which included a bunch of ETFs in a model, for example, Ascentric would do very much better.
So, house loyalty aside, I like this new shape from our Bathian friends. It’s not all great – I’d like to see a cap for bigger funds (there’s a collar for smaller ones and fair’s fair), and I’m not sure I like seeing cash included as a chargeable asset. Although it’s worth pointing out that Ascentric won’t skim cash any more, so if rates do head north it’s likely clients will be better off.
But my main thing is that Ascentric, 7IM and ATS are all getting into what I always thought wrap platforms were meant to be – genuinely open environments which were tax wrapper and asset type neutral. I’m really heartened to see this.
Financial planning and implementation can happen without any concerns about cost arbitrage between asset types in these kinds of structures, and how much more platform could that be?
The answer is none. None more platform.