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Double hit for Xmas as L&G fund charge to rise by 50%

Legal & General is set to hit investors in its £1bn fixed-interest fund with a double whammy this December when it hikes its income-deducted annual management charge by 50 per cent.

It is warning IFAs it is raising the charge to 0.75 per cent from 0.5 per cent in a bid to cover the cost of running the actively managed fund, which it says has been priced in line with an index tracker. As L&G takes charges from income rather than investors&#39 underlying capital, it means the fund&#39s yield will also be hit, falling to 4.23 per cent from 4.48 per cent under current levels.

The company says the fund will still be within the Cat-standard price framework it champions but IFAs argue that it is effectively forcing investors to pay higher charges for less income. L&G says it can no longer afford to maintain the fund&#39s performance under the existing charging structure. It is the eighth-best performing bond fund over three years.

Head of investment sales (discount houses) Marie Banfield says: “It has become impossible to continue running the trust on this basis due to the active fund management and research required to meet the trust&#39s objective.”

Hargreaves Lansdown senior analyst Meera Patel says: “It is not good news for investors by any means because they will be paying more for less income but the fund&#39s charge is still relatively low.”


Whips and Spurs

Everybody in the advertising and marketing industry knows that brand loyalty is all about giving the customer value for money, delivery of promises, a high standard of service and convenience. Sadly for advertising mogul Lucian Camp, these are qualities that his favourite brand lacks. The CCHM chairman is, of course, talking about his love for […]

GE backs Women&#39s IFA Group

Retirement planning specialist GE Life has signed a sponsorship deal with the Women&#39s IFA group. Wig was set up by Fiona Price three years ago and now has 650 members. It is established in eight locations across the UK and runs quarterly meetings. The GE sponsorship will mean the non-profit group will be able to […]

Confidence underpins property

Consumer confidence in the housing market remains high, with £141.7bn worth of property set to change hands by December, according to research by Sainsbury&#39s Bank. The research reveals that just 2 per cent of people are concerned that property prices could fall. There has been no change in the number of homeowners planning to move […]

Out of context

•”The erotic gherkin has disappeared.” – Financial Ombudsman Service spokesman David Cresswell on the London smog. •”I wonder if there is an age limit on that?” – Hargreaves Lansdown&#39s Tom McPhail contemplates a poster for World Breastfeeding Week. •”I spent all morning long saying goo goo, gaa gaa.” – Scottish Widows PR Paula Sutherland on […]


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