Creating your
future with Cofunds
Transitioning and excelling in a changing world
Turn change
To succeed in a fast-changing marketplace,
work with a platform partner that’s stayed
ahead for more than a decade.
Over the 10 years since Cofunds was established, the investment market has evolved significantly. Private investors have become more empowered, able to research, buy and change investments at the click of a mouse.
The product market has continued to innovate –
with an ever greater focus on transparency, flexibility and performance. Financial advice is shifting from a focus on selling products to building long-term client solutions. And where there were just three fund platforms when Cofunds began life in 2001 – today, there are close to 30 platform propositions vying for attention from investors, advisers and institutions.
Be ahead in a changing world.
It’s a different world, but an exciting one – and Cofunds is ideally placed to help you make the most of it.
Over the past twelve years, we’ve been constantly evolving to deliver what firms need to do more business – more easily, efficiently and compliantly.
Now, we’re positioned to support and partner with advisory, non-advisory and other financial services firms as they take on the challenges ahead.
In particular we are ready to help businesses respond to the demands and opportunities presented by the Retail Distribution Review (RDR), providing the tools, services and support to help our clients create businesses that can be efficient, profitable and in demand.
Evolving every day
to serve you better
Responding to real market needs, Cofunds
is dedicated to finding the most appropriate
solutions to real client needs.
The aim of Cofunds has always been simple: deliver what’s needed to enable our clients to do more business, more easily.
When we started, we revolutionised how advisory firms trade and hold collective funds. By transforming time-consuming manual administration into easy online execution we made it possible for more firms to deliver a whole-of-market proposition to a growing and diverse client base.
In essence, we enabled our clients to improve the value they delivered to their clients.
We then expanded the service into other sectors of the market, from discount brokers to custodians.
We introduced a cash account facility to enable our service to become a true financial-planning platform for every client. Plus we introduced tools and services to enable firms of all sizes to deliver and demonstrate an investment process that’s efficient, repeatable and compliant. We enhanced our services in 2012 to cater to the needs of firms and investors in a post-RDR world. The introduction of our segmentation tools gave firms, for the first time, the ability to offer different service propositions through the platform.
We also introduced explicit pricing and lead the market with the introduction of clean share classes, offering truly transparent pricing.
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Cofunds revolutionises the time consuming and inefficient way advisers trade and hold collectives
Institutional services
developed to meet the demand for effective dealing and custody for collectives
EO service developed to aid discount brokers to trade more easily
Focus on fee management to meet the expanding demands of advisers
Model portfolios developed to enable consistent and efficient ways for advisers to service their clients
Explicit pricing and clean share classes, offering transparent pricing on platform
Cash is put at the heart of the platform to make trading quicker and easier
Increasing support to businesses transitioning through and beyond RDR
Over a decade of delivery
Cofunds has been at its best when
identifying problems and delivering market
leading solutions
As markets continue to evolve and new regulation is introduced, we’re here to help our clients address the new market challenges they face to enable them to excel. There are some clear trends developing in the UK
investment and savings market. Each of these present challenges for financial services firms but also open up exciting possibilities:
• Shrinking advisory market
Following the implementation of the RDR, the number of advisers is set to decrease. However, the level of business that remaining advisers will write is likely to increase – a compelling opportunity for advisers who are willing and able to stay in the market.
• Expanding D2C market
The number of consumers willing to conduct their own financial-planning – particularly using online solutions – is growing. New execution-only providers are emerging, and some advisory firms will offer a non-advised proposition for lower net worth clients to enable them to produce the appropriate level of service at the appropriate cost to these clients.
• Greater pressure on margins
As charges and costs become more explicit and the value chain compresses, firms will experience even greater pressure on their profit margins. Businesses that can maximise efficiency, minimise risks and offer a clearly-defined proposition will be the winners here. • Thrive with Cofunds
Cofunds is committed to helping firms to thrive in the face of these trends. Our service is positioned to help firms transition and excel in the new market environment – building the businesses they want and the services that their clients need.
Powerful solutions
to market challenges
This can include advisory firms looking to offer execution-only services to ‘advised’ clients. Firms can offer easy access online trading, reporting and valuations to help assure profitability and a great proposition, even for smaller clients.
Enterprise Solutions – Providing stockbrokers, private
banks, product providers and custodians with efficient, open-architecture collectives administration. Straight-through-processing, an online interface and upcoming features like multicurrency dealing are all designed to help clients with large-scale fund activities to increase efficiency, reduce business risk and optimise profitability.
Build the proposition that’s right for you –
The attraction of these solutions is their flexibility. We can work with you to mix and blend the elements you require to build the solution that’s right for your business – all supported by appropriate expertise from Cofunds.
Introducing three propositions to help
provide the platform solution that your
business needs.
Over the past twelve years, Cofunds has come to serve many different kinds of financial services firms, from small advisory firms to large banks and custodians. Now – to help these different clients get the most out
of Cofunds –we have flexed our services, support and expertise into three core client solutions:
Wealth Solutions – Cofunds is offering the tools,
investment choices and services to help wealth managers and advisers deliver an advisory proposition that’s compliant, efficient and that can clearly
demonstrate value to fee-paying clients.
Investor Solutions – As demand for execution-only
Cofunds
Investor
Wealth
Solutions
Solutions
Solutions
Support
Support
Support
Enterprise
• Strategic partnership manager • Platform consultancy team • Call centre
• Events and workshops • Technical hub
• Partnered with the best
in market
• Market knowledge • Call centre
• Platform consultancy team • Strategic partnership manager • Market knowledge
• Relationship manager • Operational contacts • Risk-reduction measures • Market knowledge • Planning & risk profiling
• Online investment process • Model portfolios
• Online trading
• Clear and concise statements • Online valuations
• Straight through processing • Online interface
Wealth
Easing the move from
commission to fees
Remuneration you control
Most important of all, we aim to offer complete flexibility to enable all advisory firms to manage remuneration on their terms:
• You can still take an initial fee at the point of trade • You still have the flexibility to negotiate special terms
with fund managers
• You can still rebate units into a client’s account Guidance and support
Our platform consultancy team is on hand to discuss your preferred charging model options and how these can be administered using the Cofunds platform. To speak to a consultant, contact your regional Cofunds support team.
Transform your remuneration model for
the post-RDR world with full support
from Cofunds.
The implementation of the RDR presented many challenges for advisory firms. One of the most
daunting for many firms is the move from commission to fees, under the adviser charging regime.
Cofunds is committed to doing all we can to help make the transition easy and undisruptive – and to help advisory firms adopt a fee-based model successfully. We can provide business transition services that starts with: • Identification of business goals
• Current client base analysis • Client segmentation We also offer:
• Full support to administer both fees and commission through the Cofunds platform
• A fully unbundled platform charging model (see overleaf) that’s VAT exempt
Unbundled charging
on Cofunds
How our pricing model works
Our pricing model is simple and designed to reward clients for increasing their level of assets on platform. It features:
1. Flat service fee
The model has a flat annual fee to cover all basic platform services, including all fund switches. We’ll take £20 when your client first invests in commission free share classes, then £20 every 6 months thereafter. This will be deducted from a client’s Cofunds Cash Account.
2. Monthly tiered fee
On top of the flat fee, investors will be charged a tiered percentage fee starting at 0.29%pa and reducing to 0.15%pa for assets of more than £1m, paid monthly.
3. No upfront or switching charges
Under this model, Cofunds levies no upfront fund costs or additional charges to switch funds. This means clients can make unlimited fund switches – all covered by
our flat service fee.
A simple, flexible charging model to
clearly separate the costs of investing.
Since launch, Cofunds has operated a simple ‘bundled’ pricing model where the cost of platform services are automatically met out of the charges on the funds we host.
VAT & platform charges
Our new platform charging model will continue to be VAT exempt under the dealing and custody exemption rules.
Benefits for you, benefits for your clients
We have devised this model in close consultation with advisers, distributors and industry pricing specialists. The result is a charging proposition that has clear benefits for both adviser and client.
Simple and competitive
This charging structure is designed to be simple to explain to clients and among the most competitive in the market. Introducing a flat service fee in return for unlimited free fund switching, for example, should appeal to many investors.
Rewards consolidation
Investors will be able to see instantly that the more assets they have on platform, the less it will cost them. We hope this will aid advisers by encouraging clients to consolidate assets on platform.
Supports investment choice
Introducing this charging model will allow us to host more types of investment in the future that don’t automatically accommodate platform fees in their charging structure, including exchange traded funds (ETFs), investment trusts and direct securities.
Adviser flexibility
The model will complement any adviser charging model that a firm puts in place, whether a firm
What does RDR mean for pricing?
• Platform charges a different platform fee
Pre-RDR
Post-RDR
• Fund manager continues to receive
their fee from the AMC of the fund
Post-RDR
AMC
• Advisers no longer receive ongoing
commission determined by the
product provider*
• Instead, adviser fees are agreed
directly with the client
* except on legacy business set up before 2013
Post-RDR
Adviser fee
Fund AMC 1.5%
Platform fee
• Client was charged an annual
management charge (AMC) of 1.5%
• 0.75% paid to fund manager
Managing your
Giving continuity to your existing income
streams post-RDR.
Many firms have legacy business on which they can continue to receive commission unless the business is ‘disturbed’ – for example by revising the terms of the original contract.
As a vital source of ongoing revenue for transitioning firms, we aim to help make it easy to manage these legacy funds:
• With Cofunds, firms can continue to receive
commission from non-disturbed business as usual or transfer it to their new charging model as and when they feel ready to.
Delivering your
Non-advised business
For some clients, firms may be considering a non-advised or execution-only service. Through our Investor Solutions, Cofunds is able to fully support an execution-only service covering all the collectives and investment wrappers available through Cofunds.
Investor Solutions on Cofunds enables you to manage advised and non-advised business side-by-side. You can even segment a single client’s activities into advised and execution-only business.
A single client is able to have separate accounts for their advised and execution-only assets.
Helping you target a service to offer real
value to every client.
The Retail Distribution Review has made it essential for advisory firms to make clear to clients what service they’ll receive with RDR in place and how much they’ll pay for this – what’s known as the client proposition. A big challenge for many firms is to ensure they deliver an ongoing service that clients want to pay for that is also profitable for the firm.
Client segmentation
Many firms have come to the conclusion that they need to tailor different service offerings to different clients, each with its own pricing structure. This might typically include, a ‘gold’ service offering full discretionary wealth management, a ‘silver’ service based on model portfolios and ‘bronze’ service offering a more basic service. Cofunds aims to make it easy to manage multiple client segments:
• You can structure multiple fee-based models on the Cofunds system and automate how charges are deducted from each client’s cash account.
• You can use sales management information (MI) built up on the Cofunds system to determine which clients should be allocated to which client segment – and highlight when a client’s assets or activities indicate they should be upgraded to a new segment.
Longevity, stability and scale make Cofunds
the clear RDR partner for your business.
In a crowded and constantly growing market, we recognise that advisory firms and their clients have a wealth of platforms to choose from.
But in a time of uncertainty and massive market and regulatory change, the stability and security offered by Cofunds remains unrivalled.
Financial stability – Cofunds is the UK’s largest independent platform, wholly owned by FTSE100 company Legal and General.
Cofunds launched in 2001 and over the years we’ve grown and evolved to become the UK’s leading platform. Cofunds has been awarded a B+ in rating for its financial strength for the second consecutive year by AKG Actuaries & Consultants*.
Proven scalability – With over £50billion* in assets under administration, clients can be assured of the ability of our systems and people to handle assets of any size. The fact that we remain the fastest-growing platform by sales is a strong reflection of the trust and confidence that firms and their clients have come to place in us.
Established profitability – Whereas the majority of platforms operate at a loss, Cofunds has been in profit since 2008, providing us with funds to continue to invest in our business and our technology.
Trusted experience and commitment – With a track record of more than 10 years, we are one of the most experienced platforms on the market. We have weathered bull and bear markets and years of regulatory change. Our ongoing success can give our clients the reassurance of our steadfast commitment and presence for many years to come.
Today Cofunds supports:
• 800,000 investors*
• 2,500 funds from more than 100 fund groups*
Your future, your Cofunds
Tell us what you need to deliver the solutions
your business demands.
At Cofunds we are excited by the future and the challenges ahead. But always remember that Cofunds is your platform, designed to help you deliver your business, your way.
This is not a consumer advertisement. It is intended for Professional Financial Advisers and should not be relied upon by private investors or any other persons.
www.cofunds.co.uk
Issued and approved by Cofunds Limited
1st Floor, Minster Court, Mincing Lane, London EC3R 7AA Registered in England and Wales under No, 3965289. Authorised and regulated by the Financial Conduct
