Standard & Poor's Fund Services is set to climb down over charges after at least seven major fund firms refused to pay increased fees this summer.
Framlington, Invesco, Thr ead needle, Henderson, Merrill Lynch, Schroders and Fidelity refused to pay after S&P's raised fund rating fees in July to make the service free to IFAs.
After five months of talks, S&P is now on the verge of a deal. Merrill Lynch says it has settled the dispute and signed up for 2001.
Investment houses will be billed using a staggered system. Firms may be charged a set fee per rating for their first 15 funds and then lower fees per rating for each 10 rated funds. The service will remain free to IFAs.
A senior fund management source says: “They have come back with a much more competitive offer. The fees are steep, but better than they were. We are at least outside the bounds of fantasy. We want to see Fund Research having some concrete proposals for extending the significance of fund ratings into the wider market. The brand has lost its premium label and is going to need to spend quite significantly in the intermediary market to regain that.”
S&P's European communications manager Sophia Cunningham says: “Until we have completed our final meetings we are not ready to comment.”