The company said this morning that based on James Hay’s average Modular iPlan portfolio size, when taken altogether, the change will result in an average annual increase of around 0.036 percentage points.
The new structure provides capital to improve products, technology and service, the firm said, adding that recent pension regulation and legislation changes have increased admin costs.
The changes will be phased in, starting with IPS products from 28 April. Modular iPlan changes will take effect from 31 May and include the introduction of a new tiered structure for the annual investment centre platform charge. This will start at 0.25% on the first £300,000 investment and reduce in stages to only 0.01% on investments over £1.5m.
The headline charge for Modular iPlan will reduce from £195 to £175 for investments up to £200,000 and waived completely for investments over £200,000.
Other changes include the removal of the £50 fee for contributions and the £50 per cash transfer-in fee.
Tables below provided by James Hay:
James Hay CEO, Alastair Conway, said: “Re-pricing is an understandably emotive subject but this is absolutely the right thing for us to be doing. The changes ensure we can continue to improve our products and service and respond quickly to changing regulation – providing more flexibility and choice as clients plan for their financial future.
“We are focused on getting the basics right and have put service top of the list. It’s important to note that these changes have very little impact on our competitive pricing position against our peers. We are still well priced – especially for our core market, where we are still 5bps below the market average.”
There are additional changes to the fees levied for Sipps in drawdown which are event driven and will only be applicable to those customers using capped drawdown.
A James Hay statement read: “This new pricing structure remains in line with James Hay’s guiding principle that only those customers using certain product features and services should pay for them. Those who do not, will not cross-subsidise those who do.”
Below, courtesy of the Lang Cat, is a platform charges comparison table