M&G Investments has launched an execution-only service for investors, with lower costs than for those that come through the advised channel.
The £246bn investment house will offer lower charges for those that sign up directly to its Isa and funds service. The typical ongoing charge figure for the new service for those with at least £5,000 invested will be 1.16 per cent for equity funds and 0.91 per cent for bond funds.
M&G says its existing 190,000 direct investors will be eligible to join the new online offering.
Data from M&G shows that a direct investor with £2,500 in the M&G Dividend fund and £2,500 in the M&G Corporate Bond fund will see charges reduced by £18.75 per year with the new service.
M&G will also cut the external research costs out of its charges from January 2017. The fund house says it will not increase charges as a result, and will pay for external research directly.
Michael McLintock, chief executive at M&G Investments, says: “The lower fund charges available through our new online service will help our customers’ savings work as hard as possible, whether that’s to provide an income in retirement today, or grow capital for the future.”
Jonathan Willcocks, global head of retail sales at M&G Investments, says that the fund house remains committed to the adviser market, despite offering lower charges for going direct.
“For the majority of our end investors, who do not invest with us direct, we’re focused on supporting the excellent service provided to them by financial advisers and other distribution partners up and down the country – relationships which are hugely valued by all of us at M&G,” he says.