Aviva Investors caps charges for multi-asset range

Money

Aviva Investors has capped charges within its £2.2bn risk-rated multi-asset range.

Aviva Investors co-manager of the multi-asset and multi-manager fund ranges Tom Wells says the firm has capped the ongoing charge figure as opposed to the annual management charge cap so the client knows what they are paying upfront.

The OCF cap, which is set at 60 basis points, is not a response to the FCA’s recent scrutiny over value for money, according to Aviva.

Wells says: “This has been in the works for 18 months, trying to build up and improve transparency and be more transparent on how we build portfolios.

“The FCA report reiterates that as an industry we need to improve transparency but it is something we’ve been doing before and will continue to do.

“Currently, OCFs on my funds are between 56 and 59bps and won’t surpass 60bps.”

Few asset managers currently apply a cap on fees, but the move echoes regulations such as Mifid II that ask for costs to be disclosed in an aggregate and consistent form.

Currently, Fidelity International is trialling a new fee structure on five funds that will place a ceiling on the OCF plus a performance fee of 0.85 per cent.

Wells says he has looked at performance fee models but they are not easy to implement. He says: “You need to look at whether you have a high watermark and select a benchmark and also how platforms deal with performance fees.

“In principle it sounds like a great idea but in reality it sounds very operationally difficult.”