Sweeping fee cuts within Australia's platform sector look unlikely, with a number of the industry's key players saying they do not intend to follow MLC's lead in reducing service fees.
MLC yesterday announced that starting from 1 December, MLC Wrap clients would have their administration fees cut by 17 per cent for account balances of $400,000, while those with balances of $800,000 and $1.5 million would have fees reduced by 17 per cent.
In addition, MLC announced a capped administration fee of $4500 a year, previously $5900 a year. The cap will be applied to account balances that reach $2 million, formerly for clients with $2.4 million and above.
New pricing will also apply to MLC's Navigator platform for account balances, lowering the administration fee from 72 basis points to 60 basis points a year for amounts between $300,000 and $599,000.
MLC Wrap head of product David Wappett said while fees were not the only attractive factor of a platform, competitive fees right from the outset played a very important role in gaining clients and rewarding existing ones.
"It was definitely a competitive market out there in the last 12 months or so in terms of wrap platform fees," Wappett said.
"I think that was definitely a part of [restructuring MLC Wrap's pricing] and just periodically we do also a review of fees. We're constantly doing it and that's something we're always on the watch for."
He said bringing down the cost of the actual service directly benefited existing clients and he hoped it would also attract new ones.
MLC was unaware whether other platform providers were reviewing their product fees, he said.
"I'm not really sure what other competitors will do, but in terms of where our pricing has finished up we are now really competitive so no doubt they will be aware that ... the new fees are probably one of the most competitive in the market now," he said.
Macquarie Adviser Services head of platforms Justin Delaney said the company was not seeing significant pressure on absolute fees.
"However, as shown through the Macquarie Consolidator Series, we have responded to the increasing need to provide value and transparency to the end investor through the unbundling of platform administration and dealer fees," Delaney said.
"The need to demonstrate value has seen a number of changes to the mix of platform fees in the market and I expect this trend to continue."
A BT Financial Group spokesperson said the company was continually reviewing pricing, but BT Wrap had no immediate plans to change its fees.
