View more on these topics

FundsNetwork prepares for RDR with Fofs

Fidelity FundsNetwork has prepared for the implementation of the proposals in the Retail Distribution Review by introducing a fund of funds range with different share classes for fee-based and commission-based advice.

The portfolios are designed to allow IFAs to offer clients the same service through the same fund, regardless of whether the IFA is paid by commission or fees. A shares have an initial charge and offer flexible commission options to advise which allow for customer agreed remuneration, one of the proposals in the RDR. N shares have no initial charge and are aimed at fee-based advisers.

The five FundsNetwork portfolio funds will be managed by Fidelity’s multi-manager team. They will be graded according to risk profile and can invest in funds on the FundsNetwork platform as well as specialist funds that are not on the platform and not open to retail investors.

The defensive fund is the lowest risk fund in the range. it aims to provide income with some capital growth by investing mainly in UK bonds, with a small amount in UK equities and property. The cautious fund will hold half its portfolio in UK bonds, with exposure to UK equities and small allocations to developed market equities and property.

The balanced fund will have a higher equity weighting than the defensive and cautious funds and will include emerging markets, global bonds and commodities.

The adventurous fund invests 80 per cent in equity markets with the remainder in bonds property and commodities, while the aggressive fund invests entirely in equity markets, including the UK, developed overseas countries and emerging markets.

FundsNetwork will provide advisers with a ClientProfiler tool, comprising a question and answer-based assessment, to establish investors’ attitudes to risk. Factors such as an investor’s age, time horizon, investment goals and their level of tolerance towards volatility will be taken into account.

Once advisers have selected the appropriate risk profiles, they will select a tax wrapper if needed, such as an Isa or self-invested personal pension. The portfolio funds can then be monitored and managed online.

The two share classes are a positive development as they provide flexibility for investors and remove the need for fee-based advisers to rebate commission or offset it against their fees. The N shares are on a par with institutional share classes as they have no initial charge, but their low minimum investment makes them more accessible than the institutional share classes of other funds, as these are designed for big lump sums.
However, risk-graded multi-manager funds are not new to the multi-manager section of the market, as companies such as F&C and Skandia already take this approach.


Sense of venture

Venture capital trust fund-raisings have continued to fall from the heady sums achieved during the bumper years of 2003-06 and investors could be forgiven for thinking that these investment vehicles have had their day.

Indian summer

China seems to hog all the headlines, no doubt helped by hosting of the Olympic Games this year. In the investment world, there are now several funds that invest in China but, in contrast, there are very few funds that invest in a country which has just as much and arguably more potential – India. […]

Sesame survives the sell-off

Sesame will stay in the Friends Provident fold as it gives the insurer a good insight into the adviser market.As part of its strategic review, Friends is to sell high-net-worth IFA firm Pantheon but will keep Sesame. Friends bought the two firms last May, paying £75m for Sesame and £33m for Pantheon.The life office says […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm