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Investec AM goes 'super clean' on its six best-selling funds
by Dylan Lobo on Sep 23, 2013 at 09:13
Aird refused to comment on whether Investec was one of the 15, saying its super clean share classes will be made available to selected strategic distribution partners with no one getting preferential treatment.
’We are not doing exclusive arrangements,’ Aird said. ‘We are aligning to high quality long-term strategic partners who can carry our products deeper into the channel. We want to serve the whole of the market and access will be agreed where we can see value from long-term strategic partners.’
While Aird was reluctant to go into much detail on how these share classes would impact Investec’s margins due to its listed status, he indicated it would not be a major issue.
‘We have carefully grown our UK business over the last 13 years and don’t have a large book of direct business. Other groups which have been around a bit longer and have more of a direct business may have a margin squeeze when they introduce super-clean.’
Aird also emphasised that 0.65% was a perfectly fair price.
‘Post RDR there needs to be real industry debate between cost and value for money- 65 basis points is a very fair price for these types of funds. These are our six best-selling funds and it’s our belief that you can charge that price for alpha.
'A lot of people may see this as a threat, which is probably why they are dragging their heels on the issue. These super clean classes allow advisers to know where they stand and they can now have sensible conversations with their clients.
Aird expects more groups to reveal their super-clean propositions over the next few months, which he believes will play an important role in restoring trust in the industry.
‘As a committed active investment manager we wholeheartedly embrace a move to greater transparency and simplicity for the end investor. In an unbundled world, investors and their advisers will be able to make a fully informed decision, armed with total clarity on the cost of administration, advice and investment management,' he said.
‘Our industry must play a central role in rebuilding investor trust and confidence; this journey starts with the introduction of greater transparency, simplification of charging structures and a primary focus on investor outcomes and value for money.’
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