Just a short post to confirm that as of today Cofunds has removed the establishment (setup) and annual charge on its Suffolk Life-provided Cofunds Pension Account (CPA). The table shows you what it was and what it is:
This is a welcome development. For a long time I’ve been banging on about ‘mid-market’ (sorry) platforms cutting off their noses to spite their faces with differential pension pricing. With typical pots on the Big 3 being, well, let’s just say ‘sub Â£100k’ it’s hard to justify Â£150 upfront and Â£150 a year for a basic pension wrapper, especially when combined with a custody charge. As a result Cofunds has attracted fewer pension assets than it might otherwise have done; the removal of these charges and the trimming of the drawdown charge sits nicely with the removal of the Â£40 platform charge a wee while ago and gets it much more in shape for its natural market.
So how does our SIPP table look? Here’s a wee cut of it (subscribers get everything):
I should mention that the heatmap on this page only deals with the providers included; it’s not a whole-market picture. Again, subscribers get the lot.
So Cofunds looks really good now, and stays pretty competitive (outside the fixed fee brigade) right up to Â£500k and more. Job done for the Mincing Laners on the pricing front.
As far as drawdown goes, this isn’t as cheap as FundsNetwork, which is free, and I think these charges have further to fall. But it’s not too toxic; there is an open issue, however, about how charging will work for smaller pots using drawdown post-Budget, and this doesn’t solve that. One for the months to come, perhaps.
None of this addresses the core issue many advisers have with Cofunds, which L&G has acknowledged. ‘Years of underinvestment’ is not a phrase anyone likes to hear unless they’re an incoming government, but it’s probably true and Cofunds (and its supporters and their clients) deserves the best it can get. We hope that promise is fulfilled.
The barriers are down for Cofunds to now be a major competitor in the multi-wrapper space; it’s up to the management team now (and I can’t work out whether that’s in L&G or in Cofunds itself) to ensure the experience is up to scratch, and then they really are off to the races.