ING has become the latest financial services firm to assist the cultural change in the industry towards an increased emphasis on fee-for-service advisory models, launching a new platform product that unbundles all fees usually associated with offerings of this kind.
The product is a variation of ING’s OneAnswer platform and will be known as OneAnswer Select.
The unbundling of the platform and adviser fees on the offering means OneAnswer Select can provide a choice of four different adviser service fee structures, including entry fee, nil entry fee, one-off and deferred.
ING executive director, sales and marketing, Dan Powell said while the product itself does not seem innovative on the surface, some of the underlying features associated with it are unique.
“We offer what we call the Deferred Adviser Service Fee, where the adviser can actually charge a client an ongoing fee but be remunerated upfront, and ING funds that,” he explained.
“If the client decides to leave the fund we reclaim that fee from the adviser and not the client,” Powell said.
The new platform has also incorporated distinctive transparency characteristics as well in its reporting to clients.
“We actually rebate the commission on the client statement so the client will clearly see it. There will be a notation on the statement labelled Selector Rebate,” Powell said.
ING has also structured the product to make it possible to switch from OneAnswer to OneAnswer Select in a tax effective manner.
“Because the new product is the same basic product as our platform with commission in it, a client can move between Select and the original OneAnswer without triggering any capital gains,” Powell said.
“In essence, this industry over time needs to move to greater transparency around each part of the value chain and that takes time to happen. That’s where the industry will be heading in the longer-term, and this is part of providing a solution for those advisers who are making that transition,” he added.