Deloitte warns on 'prohibitive' cost of developing new share classes

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Fund managers looking to offer clean share classes could find it "cheaper" and "simpler" to adapt existing institutional share classes as opposed to developing new ones, Deloitte has suggested.

The recently confirmed ban on legacy commission post 2013, in addition to a likely ban on platform cash rebates, makes it imperative for fund managers to introduce RDR-compliant share classes with adviser commission and platform charges stripped out. But business advisory firm Deloitte has said the cost of developing new factory-gate share classes will be "prohibitive", citing the need to seed the new share classes, register the classes and publish a prospectus and key information documents.  "The costs could be prohibitive, particularly if repeated across a large number of retail fun...

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