Skandia yesterday announced it would be transferring clients currently invested in mirror versions of Neil Woodford’s former Invesco funds – now run by Mark Barnett – into a Skandia-mirror version of Woodford’s new fund in October.

Whilst not having discretionary powers, by opting to close its own-branded versions of the Invesco funds the platform is obliging clients to move to a new fund and hence incur costs, unless they wish to liquidate their investment.

Another option would have been for Skandia to keep open the existing Invesco Perpetual mandates – which have £640m invested in them – and launch Woodford’s fund alongside Barnett’s mandates.

In a letter sent to investors, and seen by publication Investment Week, Skandia tells clients: “The one-off costs for making this change will be around 1 per cent of the value of your holding, which represents the various transaction costs of dealing in the underlying securities including stamp duty.”

Given the two funds hold assets of £640m in total, Skandia estimates investors will be charged around £6.4m in total.

It adds: “We will minimise these costs as far as possible.”

Skandia responded by telling Investment Week that over the long term, thanks to the preferential deal it has agreed with Woodford Investment Management, the lower TER on Woodford’s new fund – 1.1 per cent vs 1.3 per cent for the Invesco portfolios – will mean clients save money.

A spokesman said: “Longer term we do not believe customers will lose out, which is why we have made this decision.”

Skandia added the total expense ratio of the Invesco funds would likely climb if large numbers of investors opted to switch out of Invesco and follow Woodford. As such, it argues acting now en masse will keep costs down in the long-term.

Skandia also said it is not making any money out the switch.