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Business battle looms as five big firms snub Fidelity supermarket

Fidelity has set up its fund supermarket to acclaim from IFAs but with five fund management heavyweights refusing to sign up.

The new supermarket, called FundsNetwork, cont-ains 256 funds from 14 fund managers.

The managers are Aberdeen, Barings, CGU, Deutsche Asset Management, Fleming, Fidelity, Henderson, HSBC, Invesco, Mercury, Newton, Norwich Union, Schroder and Virgin.

But the five refusniks, Gartmore, Jupiter, M&G, Perpetual and Threadneedle, together make up nearly 40 per cent of the UK investment fund market.

Money Marketing reported in April that companies including Gartmore, M&G, Schroder and Threadneedle had concerns about how it could affect their relationship with IFAs.

Of these, only Schroder has subsequently decided to join.

The refusal of the others to sign up has led to predictions of a fierce fight for business, with Fidelity pitting the efficiency of the supermarket against the popular appeal of the five managers.

Industry experts believe the five may be forced to club together on a rival project.

Fidelity says the new system will be commission-neutral so IFAs should get the same commission as if they had gone to the fund manager direct although this will also depend on the individual fund managers. IFAs can access the service through the Fidelity&#39s IFA portal Access.

Several investment IFAs, including Best Investment, Chase de Vere, Hargreaves Lansdown and Torquil Clark, have signed deals to run their own branded websites hooked up to the Fidelity service.

Fidelity executive director Robin Threadgold says: “The reaction from IFAs has been very positive. I think fund supermarkets will become very influential here.”

Jupiter sales and marketing manager Steve Glyn says: “We are currently market leaders in the IFA sector and we have a considerable duty to our intermediaries to continue to grow our market share.

“While Fidelity may offer IFAs a quick-fix solution, it does not necessarily offer the facilities to service what is a very competitive marketplace.

“We will see several other fund supermarkets in the next few months and we want to make a valuation of which is the best to go into at a later date. We need to be sure we are making the right decision.”

Threadneedle director Richard Eats says: “This form of intermediary could cut us off from our customers. There are other platform providers and there will probably be a number of different models.”

Chase de Vere investment director Graham Hooper says: “They have a great range of fund managers although M&G and Gartmore would have been nice.”


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