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Fidelity will pay trail on unwrapped funds

Investment giant Fidelity will pay trail commission for the first time on unwrapped investments into 20 of its funds in response to IFA demand.

The firm already pays trail on investments inside Isas but is making the move in response to repeated calls from IFAs to contribute towards the cost of their clients’ ongoing portfolio management for lump- sum investments.

Commission will now be paid on all new such investments into the majority of the firm’s UK-domiciled products, including 0.5 per cent on Anthony Bolton’s special situations fund.

Other funds paying trail for the first time in this way include Tim McCarron’s European fund, Richard Skelt’s WealthBuilder fund and Mark Hodges’ UK aggressive fund.

The move follows the firm’s decision last month to reduce the annual management charge on its UK tracker fund from 0.5 per cent to 0.1 per cent in an attempt to attract new investors.

Fidelity hopes to attract enough new business to pay for the undisclosed costs of the move.

Head of IFA channel Peter Hicks says: “I cannot claim we have suddenly seen the light on this because IFAs have been asking for remuneration for their ongoing service for some time. Recurring revenues are good business for the adviser.”

Chelsea Financial Services managing director Darius McDermott says: “This brings Fidelity into line with the rest of the market and while it is late, it is still welcome.”


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Allianz Technology Trust – April 2017

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