Legal & General Investments has cut tracker fund charges for UK advisers in anticipation of post-RDR popularity.
L&G has lowered the charges on a number of its tracker funds by five basis points, an altogether reduction of up to 25 per cent on last year’s annual management charge.
The reduced charges will apply to the ‘I’ and ‘M’ unit classes of each fund, referring to the clean priced units which are also available on platforms. Such new charges will also apply to direct intermediary deals that meet minimum investment levels.
L&G has made the cuts to these charges in response to the RDR and the impact this has had on the popularity of tracker funds.
From today, the AMC for L&G’s single country and regional tracker funds is 0.15 per cent, reduced from 0.20 per cent. This range includes L&G’s £4.24bn UK Equity Index fund.
The AMC for core global tracker funds, which includes the L&G Emerging Markets Government Bond Index fund launched in November 2012, has been reduced from 0.3 per cent to 0.25 per cent.
L&G Investments managing director Simon Pistell says: “Interest in passive investing in the UK has steadily grown over the last two decades and 2013 could be a watershed moment.
“The RDR and shift to a fee-based advice environment has increased the pressure on advisers to offer greater value and reduce portfolio costs. Some are considering dipping their toes into index funds for the first time, and others are looking at new ways index funds can be used to construct portfolios.”