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Flagship funds shun Selestia in charges row

Two of the leading providers on Old Mutual&#39s Selestia platform have refused to make their flagship funds available following a disagreement over charges.

Credit Suisse Asset Man-agement has not provided its income or monthly income funds for the platform while Framlington has omitted its health fund. The dispute over charges has been the main reason for Henderson leaving its funds off the platform.

The quarrel has centred around Selestia&#39s decision to not pay fund managers any front-end remuneration while keeping 50 per cent of the annual management fee.

Although this is competitive with other fund supermarket platforms, the lower AMC on CSAM&#39s income funds has left the firm marginally worse off on Selestia while Framlington has said it would also come out slightly worse off on Selestia.

The news is another blow to Selestia, which is missing eight of the biggest UK fund managers from its platform, including New Star, Henderson, HSBC and Fidelity.

CSAM managing director Ian Chimes says: “We felt that we had a premium product and that everyone was keen to look at – and we did not want to cut our margins to that degree. We are a supporter of what Selestia is doing, but it has to make sense on both sides.”

Selestia marketing director Bill Vasilieff says Selestia will not suffer from the omissions.

He says: “It goes back to the same argument – 90 per cent of performance comes from asset allocation, and then you need some good funds to choose from. We have got some of the top-performing funds in their asset classes.”

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