Nordnet to Lower Fees on Most Funds
Nordnet is changing its fund fee structure from September 1. Most funds will become cheaper, while index funds will see a slight price increase.
Online bank Nordnet announced on Friday that it will implement a new fee model for funds effective September 1. Under the revised structure, Nordnet will pass on all retrocessions (distribution fees) received from fund companies directly to its customers. In return, Nordnet will introduce a platform fee charged directly to the client.
The previous system, where fund companies paid distribution fees to platforms, has faced criticism for potentially creating conflicts of interest, as it could incentivize recommending more expensive funds over cheaper ones. Nordnet states that the new model aims to provide a fairer and more transparent pricing system.
The new platform fee will vary based on fund type and investment amount. For equity funds, the fee is set at 0.3% for the first 500,000 units of currency, with decreasing rates for larger holdings. For fixed-income funds, the fee is 0.15%, also with reduced rates for higher amounts.
Nordnet anticipates that approximately nine out of ten funds will become less expensive for customers following this change. However, the prices for index funds, which are among the most popular, are expected to rise slightly. This is because the platform fee will be uniform for both actively managed and passively managed funds. The company will also launch new proprietary index funds in September that will have no management fees.