Industry must get to grips with share class conversion

clock • 1 min read

When the FSA first announced its RDR in June 2006, its aim was simple: to ensure consumers knew exactly what they were paying for their funds, platforms, and advice.

Eight years on, and the project seems far from over, as advisers continue to get to grips with the idea that, for many of their clients, clean share classes may in fact be more expensive than others. The issue is not that clean share classes are more expensive per se – though in some cases that is also true – but rather that a quirk with how dual-priced funds are being converted to clean by some platforms may push up prices. In a standard dual-priced transaction – selling one fund to buy another – an adviser sells the client’s existing fund at the ‘bid’ price and buys a new fund at it...

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