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Fund firms fight fee hike to pay for S&P&#39s free ratings for IFAs

Top fund managers are resisting moves by Standard & Poor&#39s to raise their fees as part of plans to offer fund research to IFAs free of charge.

Schroder is one of a group of fund managers currently locked in negotiations with S&P. Schroder director of client services Robin Stoakley says: “Obviously, negotiations between any firm and S&P are confidential. However, it seems quite clear that S&P is taking a very aggressive line with its mutual fund business strategy.”

The move by S&P will leave fund managers footing the entire bill for research and comes on the back of S&P increasing its fees for the rating service. Fund managers are also angry because they feel under increasing pressure to get their funds rated.

The move giving IFAs free access marks a reversal in the way that fund research is paid for. When research started in 1989, advisers and fund providers would share the cost for research.

But recently, S&P has begun to publish its ratings openly – increasing the pressures on managers to pay for their funds to be rated.

Funds which are not analysed by S&P do not appear in its published tables and are often overlooked by investors and IFAs.

S&P UK sales director Chris Fishwick says: “Our independence and integrity is of paramount importance but you cannot have it two or three ways. We realise that we now have an impact on the market but ultimately we are simply working in the interests of the industry.”


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