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Two fund managers rethink clean prices after MM probe

Two fund managers are reviewing their pricing after a Money Marketing investigation revealed some clean share classes are more expensive than the bundled fund.

Last month the FCA said converting to clean share classes should only take place where it is in the client’s interest.

Aviva Investors, M&G, Ruffer, Aberdeen, JP Morgan Asset Management, Blackrock and Royal London Asset Management all offer more expensive clean terms. Increases on clean funds typically range from 0.055 per cent to 0.25 per cent.

Nucleus chief executive director director David Ferguson says: “This highlights the danger of a mass conversion because there are clearly some customers that could be disadvantaged.”

Novia chief executive Bill Vasilieff says it is the fund manager’s decision to charge more.

Aviva and JPMAM have clean funds that are 0.25 per cent more expensive.

An Aviva spokesman says: “For the Global Balanced Income Fund, the institutional share class annual management charge is higher than the retail share class AMC, allowing for a 50 per cent rebate. This was an oversight on our part as we were not expecting demand from IFAs through platforms for this fund. We are now reviewing the position.”

JPMAM head of funds Jasper Berens says the pricing of its Emerging Markets Fund is an “anomaly” which it will look at in ongoing pricing discussions.

Ruffer says its previous 1.5 per cent charge on its Total Return Fund included a 50 basis points rebate for selected distributors. The clean price is 1.2 per cent. A spokeswoman says: “We believe the new clean share class AMC reflects the costs of investing with Ruffer.”

Aberdeen said the new clean price reflected the charge levied on similar Aberdeen funds globally. M&G says the Emerging Market Bond clean price is ”broadly consistent with the clean share-class pricing across M&G’s range.”

Royal London said its increase covered the cost of creating the new share class.

Head of marketing Susan Spiller says: “The nature of getting the new share classes up and running means that one has a slightly higher additional charge. Over time we expect that to converge and it has nothing to do with us thinking that we should pass on additional cost to people.”

Blackrock declined to comment. 

Plan Money director Peter Chadborn says: “Every switch to clean share classes creates a huge admin burden for advisers. Fund houses behaving this way does nothing to help.”

Fund Post rebate price Clean price Increase

Aberdeen Latin American



Aberdeen World Equity



Blackrock Gold and General



Blackrock Natural Resources Growth + Income



M+G Emerging Market Bond




Ruffer Total Return



RLAM UK Gov Bond

TER 0.395

TER 0.45 (increase in additional expenses)


JPMAM Emerging Markets




Aviva global Balanced Income





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There are 2 comments at the moment, we would love to hear your opinion too.

  1. You might want to check some of the funds on the Skandia platform. For example the AXA Framlington Biotech fund Z class is more expensive than the current class. This makes it vey difficult to figure out and make a recommendation particularly if a business operates model portfolios.

  2. It will be very interesting to see how this plays out. We’ve spoken to 2 leading wrap providers this week who have completely polarised views on how fund charges will settle down on various platforms.

    As was the case this time last year …. legislation change is in the pipeline yet the providers do not yet know how this will be implemented for investors.

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