Quilter reduces platform fees but takes cut from client cash

Quilter is “significantly” reducing charging on its platform but at the same time will start retaining an element of clients’ cash interest rate.

The price cut from the provider will see an average 15 per cent reduction in platform charges for customers.

For example, a customer with £300,000 on the platform can benefit from a £750 reduction in charges over five years, while a customer with assets of £600,000 could see their charge reduced by £1,500 over the same period.

This reduction in charges is partly funded by the firm now retaining an element of interest on cash held by customers.

Quilter said while continuing to pay a competitive rate of interest to platform customers who typically hold marginal amounts of cash, the company will retain an element of the cash interest rate its treasury team negotiates, which will be clearly explained on its website. 

The provider’s automated cash management also ensures minimal cash balances are held for the purpose of paying fees and charges. 

This approach significantly reduces the effect of cash drag in comparison with some platforms which mandate higher minimum cash account balances, the FTSE 250 company said.

Steven Levin, chief executive of Quilter said: “Since launching our new platform technology in 2021 it has always been our intention to share our success with customers as we realise efficiencies as more clients and advisers transact online.    

“Our new approach to cash interest rates has allowed us to make a more meaningful price reduction. Our platform cash account is not intended to be a home for long-term savings and our automated cash management feature ensures that platform cash is kept to a minimum. 

"Our proposition is aimed at customers that want to predominantly invest in funds for the long term, and we have a range of money market funds should customers need to hold more cash.”

In addition, Quilter will launch tiered adviser charging this summer to allow advisers to more easily tailor charges based on different customer segments.

Advisers will be able to construct their own tiered charging models with up to 11 tiers on Quilter’s platform, which they can then apply to one or more clients. The effective rate for each customer will be clearly displayed on the platform and disclosed in documentation.

Levin added: “The ability to build and maintain tiered adviser charging is not widely available within the platform market. This functionality will become essential for advisers that have segmented their client base and are tailoring their advice fees in response to the consumer duty. I’m delighted we can support advisers with an enhancement like this that enables them to deliver real value to a range of client segments.