Twitter icon Email alerts icon Latest News RSS icon Magazine icon Stay connected:

View the article online at http://citywire.co.uk/wealth-manager/article/a584744

Brewins warns not to leave RDR pricing too late

by Danielle Levy on Apr 27, 2012 at 00:01

Brewins warns not to leave RDR pricing too late

Brewin Dolphin’s head of research Matthew Butcher has warned that fund groups could lose out on business if they set their retail distribution review (RDR) pricing structures too high or too late.

Butcher (pictured|) told Wealth Manager that the group would look to increase its allocation to direct securities, guided by its internal research teams, and to passives if fund houses’ RDR pricing structures are unattractive.

He also anticipates that the open-ended funds industry may struggle to grow at the same pace it has done over the past few years.

‘Part of the reason for this is I think fund houses have been quite slow to launch RDR share classes,’ he said. ‘We are very mindful of the total costs to clients for our services and third parties, so in the event that fund pricing is too rich for us on 2 January 2013, we are likely to see increased direct investment in the market and we can cater for that.’

While a number of large fund groups are seeking late mover advantage, he said that Brewins will find it difficult to wait for RDR share classes that are launched in January 2013.

‘In the meantime, what do we do with new money? We will invest in ETFs where pricing is clearer. This is what we are leaning towards,’ he said, highlighting the firm’s internal direct equity and bond research teams.

He also stressed his concerns that advisers use passives appropriately and not simply to improve their margins.

Schroders, Cazenove, Invesco Perpetual, MAM Funds and Guinness Asset Management are among the fund groups that have launched RDR share classes ahead of the January 2013 deadline.

In January, Cazenove Capital Management, for example, set its X share class’s management fee for adviser clients on platforms at 0.75% for equity funds and 0.5% for its multi-manager range and waived its £1 million minimum.

Schroders’ Z share classes, which launched in October, have an annual management charge of 0.75%.

3 comments so far. Why not have your say?

Anonymous 1 needed this 'off the record'

Apr 27, 2012 at 08:34

Shame Brewin were not so 'mindful of the total costs to clients' when ramping up their fees late last year.

report this

Anonymous 2 needed this 'off the record'

Apr 27, 2012 at 08:47

I wonder which competiting broker Anonymous 1 works for?

report this

Andrew Whiteley

Apr 27, 2012 at 10:55

"He also stressed his concerns that advisers use passives appropriately and not simply to improve their margins."

But overpriced DFMs who previously extolled the virtues of active management using them to reduce their TERs to improve their competitiveness is ok!!

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Sponsored Video: Bringing it all back home


As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

Investing for income in a changing environment


With talk on interest rates on the horizon, our latest roundtable debate covers income investing against a changing backdrop

On the road

Click here to find out more from the Audience Development team.

Sorry, this link is not
quite ready yet