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Towry's Wilson: give us Hargreaves' terms or we may sell
by Danielle Levy on Feb 28, 2014 at 08:19
Towry's head of investment Andrew Wilson says he will consider redeeming when he has an alternative lined up if he does not receive equivalent or cheaper terms for funds on Hargreaves Lansdown's core Wealth 150 + list.
With around £5 billion invested in funds, Wilson (pictured) said he hopes to see fund groups valuing the long-term relationships that Towry tends to build with asset managers and not sacrifice these for short-term volume.
As the industry awaits to see which fund groups have offered competitive pricing to make it onto Hargreaves' core list on 1 March, Wilson said his firm has already redeemed a significant holding in a fund on the Wealth 150 after finding out the fund group had offered better terms to Hargreaves and would not match them. The proceeds were recycled into the group's 'best ideas' funds, where it had negotiated extra capacity with the managers prior to them closing.
The direct-to-consumer platform has negotiated an average AMC of 0.65% on its Wealth 150 and 0.54% on its soon-to-be revealed 150 plus list.
He said redemptions would be made for a 'mosaic of reasons' but one of the most significant would be because of concerns about the alignment of interest between the fund group, Towry and its underlying clients.
'We would expect to have market-leading terms and expect people would want to have a good partnership with us, as we are long-term investors,' he said.
He added that Towry is also growing its assets under management and develops a deep understanding of how fund managers run money.
Towry is at an advantage in comparison to other private client investment firms when it comes to fund pricing negotiations as it invests through funds of funds and can therefore receive discounts through rebates.
In contrast, competitor discretionary managers now face the challenge of negotiating access to super clean discounted share classes where annual management charges (AMCs) will be disclosed.
While Fidelity announced an average AMC of 0.64% on its Select list, Wilson was encouraged to see that the platform is not getting cheaper terms than Towry.
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