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Analysts doubt platform price squeeze as Fidelity publishes clean funds list

Fidelity has published its list of new clean prices, with only four actively managed equity funds priced below 0.75 per cent.

Analysts at Numis Securities say it shows platforms have not been able to apply as much pressure on fund managers as first thought to secure preferential terms.

The ‘Select’ list of funds on Fidelity’s direct-to-consumer platform shows only four of the 66 active funds on the list are priced below 0.75 per cent. 

These are:

  • Baillie Gifford Japanese Fund – 0.65 per cent
  • Fidelity MoneyBuilder Dividend Fund – 0.5 per cent
  • JOHCM UK Equity Income Fund – 0.63 per cent
  • Royal London UK Mid Cap Growth Fund – 0.7 per cent

Fidelity said in December that five of the top 20 fund mangers had not yet agreed terms under Fidelity’s ‘Access’ deal, which gives fund managers increased access to Fidelity management and enhanced marketing in exchange for offering their lowest available share price.

Numis analyst David McCann says: “Whilst the headline average clean price of 65 basis points would appear to imply a price reduction for fund managers versus the industry status quo of 75bps, the reality is different. 

“Only four out of 66 actively managed equity funds are at rates lower than 75bps and nine are actually priced above 75bps. In our view, this suggests no incremental margin pressure for the fund managers appearing on the list.”

McCann adds: “Our initial impressions from a fund manager perspective is mostly one of relief: it appears that one of the big platforms – Fidelity – has not been able to negotiate any material price reductions compared to the status quo, on a like for like basis.”

Other platforms, including Hargreaves Lansdown, Standard Life and Barclays have yet to confirm full clean pricing lists.

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