Axa Wealth is to close 115 externally managed funds because they are no longer economic to administer.
Within these funds, Axa Wealth says investment has fallen to a level where the funds have become “uneconomic to maintain”, the company said on its website following a ‘funds rationalisation’.
However, no in-house funds will be closed in the review as they did not meet the “closure criteria”, a company spokesperson said.
The funds will close between 23 November and 7 December.
Axa Wealth said advisers who have clients invested in these funds through an AXA Wealth product will receive a letter with the details as well as their closing funds and closure dates.
When the funds close, investments will be moved into default funds, or to alternative funds from the firm’s range if the investor chooses.
For example the AXA Wealth Old Mutual Managed fund will be closed and investors will be transferred to the default AXA Wealth Elite Balanced Managed.
Rowley Turton Chartered Financial Planner Scott Gallacher says it is “a recurring theme” among investment firms to reduce the range of funds, but not many have done it in “such a drastic way” as Axa Wealth.
He says: “You have to question whether they were honest at the start when they were launching these products because if you have a large range of funds you have to work out if their number is sustainable.”
The replacement funds AXA are switching clients into are “almost invariably” an in-house AXA fund, including AXA, AXA Framlington, Architas or AXA Wealth Elite, says Turton.
He says: “Almost invariably they are replacing externally managed funds, with internally managed funds, so I am not entirely sure it has been a completely fair and honest assessment of what the best replacement funds are for all those fund.
“It seems to read if they’ve had an Axa fund that is broadly similar, you get the Axa fund instead.”
Turton says the move is “almost misleading”.
He says: “People who have bought that product haven’t bought to invest it with Axa necessarily, they’ve bought it out of a wide range of external funds and now they are going to have 115 less funds to chose from.”