Legg Mason scraps trail commission across fund range

Sunset-Desert-Arizona-Cactus-700Legg Mason has cut fund management fees on the Class A shares of its funds ahead of the Sunset Clause as it scraps trail commission.

The asset manager will cut the annual management charges on its fund range as a result of the move, from 1 April 2016. For fixed income funds the charge will drop by between 40 basis points and 45 basis points, depending on the fund.

For equity funds Legg will cut the annual management fee by 50 basis points. It will also scrap the initial charge for Class A subscriptions across equity funds.

For example, the Legg Mason IF Japan Equity and the Legg Mason IF Royce US Smaller Companies funds will see the annual management charge cut from 1.5 per cent to 1 per cent.

The Legg Mason IF Brandywine Global Income Optimiser and Western Asset Global Multi Strategy Bond funds will see their annual charges cut from 1.25 per cent to 0.8 per cent, while the Legg Mason IF Western Asset Retirement Income Bond Fund charges will be cut from 0.7 per cent to 0.3 per cent.

The multi-boutique firm revealed its plans ahead of the deadline in April 2016. It has £361.4m in assets for the class A shares across the 19 funds affected, as at the end of December.

Adam Gent, head of UK sales, says: “With the advent of the RDR sunset clause, we have taken the decision to review fees because we believe that it is the best thing to do for our clients.

“With the considerable reduction in our fee levels, it will provide a more competitive fee structure for our clients. Our aim is to make sure that investors continue to receive value for money from our UK-based fund range.” 

Standard Life Investments has already revealed its plans to cut all trail on its fund range ahead of the sunset clause. However, the firm came under fire after cutting its charges by 20 basis points – less than the previous trail commission it paid out.