Assetz Capital has introduced a lender fee for all of its investors following a “substantial drop” in the platform’s income due to the Covid-19 pandemic.
A new funds under management fee of 0.9 per cent per annum will be in place for at least the next three months, which is the equivalent of 0.075 per cent per month. It will be taken on the 1st of each month, starting today (1 May).
Assetz Capital said this was not a decision that it had taken lightly, adding that 0.075 per cent per month is the lowest fee that it could charge. The platform hopes to reduce and eventually remove it as quickly as possible.
The fee will be calculated throughout the month based on investors’ funds under management, and it will be taken as a reduction of the actual interest received.
“Strategically, we are aiming to protect the long-term interests of our investors,” said Stuart Law, chief executive at Assetz Capital.
“That sits at the heart of our decision making.
“Our leadership team has worked through several economic cycles including the Global Financial Crisis, and it’s this experience that is informing our decisions.
“We will continue to be practical and pragmatic in our approach.
“While stock markets have fallen very substantially, dividends are being cut or cancelled across the board and bank interest rates are near zero, we are still delivering healthy interest to our investors – with a strategy in place to seek to ensure that this continues.
“We hope – and expect – that the fee will be temporary.”
The lender fee applies to the funds under management in the prior month and no fee applies to loans in default or recovery. Where a borrower misses a payment and the investors will not receive their interest payment that month, they will not pay fees on those loans in that month.
For investors in the access accounts, the fee will be taken from the manual lending rate of the loan and the amount left will be used to pay the target interest rate and any excess used to top up the provision fund.
Consumers investing across both standard and IFISA accounts will be treated separately, so fees accrued in the IFISA account won’t be taken from interest in the standard account or vice versa.