Legal & General Investment Management (LGIM) has introduced a single combined fee for its retail funds to simplify charges for investors.
The new fund management fee (FMF) that kicks in today will cover the costs of running the fund and will replace the ongoing charge figure (OCF) that is currently applied to the funds.
Previously, LGIM levied an annual management fee as well as administration charges, such as variable extra expenses, which were applied separately and together form the OCF.
However some costs will not be included in the FMF, such as transaction fees, which are payable each time a fund buys or sells assets.
Honor Solomon, head of retail distribution at LGIM, says: “It’s really important that our customers understand the charges that they’re paying when investing. At the moment, there are a number of charges disclosed separately and it can be pretty confusing.
”The FMF will provide a clear and consistent measure of overall fund charges that we believe will be simpler for our investors to understand. Rather than getting distracted by the complexity of fund charges, investor focus can instead be on making the right investment decisions.”