Cazenove has given advisers access to institutional rates on its multi-manager and equity funds as part of a raft of changes it is making ahead of the RDR.
The company has opened up its institutional X share class to retail investors, which operates a 0.5 per cent annual management charge on its multimanager range and a 0.75 per cent annual charge on its equity funds. The usual £1m minimum investment will be waived, providing it is advised business invested through a platform.
The existing retail B-share class, which carries an annual charge of 1.5 per cent on equity funds and 1.25 per cent on multi-manager funds, will continue for life companies and legacy assets. The existing unbundled A-share class, which has an AMC of 1 per cent on both equity funds and the multi-manager range, will also continue for direct-to-consumer platforms.
Cazenove head of UK retail Robert Thorpe says: “There should be no circumstance where a direct client can access a fund at the same price or cheaper than an IFA can offer it to them.”
The firm says it will offer the institutional rates to retail investors based on the demand on each platform. If there is sufficient demand from advisers and clients wanting to access the X-share class, Cazenove will put it on the platform, subject to the platform’s approval.
As part of wider changes,Distribution Technology has risk-profiled Cazenove’s multi-manager fund range, with the six funds that make up the range given a risk profile of between four and eight.
Distribution Technology has riskprofiled the multimanager diversity fund as four, the diversity income fund as four, multi-manager diversity balanced as five and multi-manager diversity tactical as six. The multi-manager UK growth fund is risk-profiled as seven and multi-manager global excluding UK as eight. Cazenove has set up a new arm bringing together its multi-manager range and discretionary fund management service under the name Cazenove Portfolio Management Service.
The multi-manager range will cater to mass-market clients with a minimum investment of £1,000, while the DFM service will be targeted at more sophisticated investors with a minimum investment of £250,000.
The company is also launching a new version of its diversity balanced fund in April, subject to FSA approval.
It will be a non-Ucits regulated scheme and the current Ucits fund will be renamed.
Thorpe says: “We now manage over £1.5bn on behalf of advisers via our DFM service and flagship diversity fund. Through the Cazenove Portfolio Management Service, we can further assist advisers by delivering a range of risk-profiled funds which offer low-cost pricing and have a credible investment track record in excess of five years.”
Equilibrium Asset Management investment manager Mike Deverell says: “The charges are pretty reasonable and opening up institutional classes through a platform makes things a lot simpler. There should be more competition on cost and I think we will see a lot more of this.”
How asset management firms are gearing up for the RDR
Three low-cost funds were launched by Fidelity last October – multi-asset allocator defensive, multi-asset allocator balanced and multi-asset allocator growth. The funds have a clean fee share class of 0.5 per cent. It has also added to its discretionary sales team as it expects the discretionary market to grow. It is yet to announce further details of its clean share classes for other funds.
Launched three low-cost funds between March and June last year, including the dynamic multi-asset fund, with a capped total expense ratio of 0.5 per cent. In November last year, it launched its clean fee share class for funds in its UK unit trust range, at roughly half the charges for existing share classes. Schroders has also made its flagship RDR fund – the Schroder UK core fund – available on eight platforms.
JP Morgan Asset Management
January saw the firm launched a low-cost active managed fund, the JPM UK active index plus fund, with a capped TER of 0.55 per cent. The company has said it wants to offer more low-cost funds.