Fortnightly News Blog – 18 May 2021

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How low can you go?

Aberdeen Standard Investments – soon to become simply Abdrn – has been busy reviewing fees on a number of funds. Retail investors stand to benefit from cuts of between five and 25 basis points, according to Portfolio Adviser.

Fidelity International is making similar changes to some of its multi-asset funds, trimming 5bps from the fees on five products, reports Investment Week. Elsewhere, the group has also dropped an innovative ‘fulcrum fee’ model it applied to five equity funds in 2018 due to a lack of investor interest, as FTAdviser details.

Cost management for fund managers could be boosted by proposed changes to MiFID II reporting rules, Investment Week reports, which could cut compliance costs by £6.7m a year across the industry.

The rise in remote working is pushing fund management groups to reassess some costs. This Ignites Europe report (subscription required) details the contents of a letter from the UK’s Investment Association and its German counterpart, BVI, to data providers such as Bloomberg and Refinitiv. In it, the trade bodies argue that current pricing models are inappropriate as they charge significant fees to add new locations to licences.

Year Two AoV

Not everyone is cutting fees, however. The £24.4bn Fundsmith Equity fund has maintained its fee level after its second AoV report, but Citywire’s James Phillips questions whether the company is passing on scale benefits in this article.

Schroders’ fund board is facing a challenge that is likely to be seen in many a (virtual) boardroom this year: how to act on funds flagged in two consecutive AoV reports. Portfolio Adviser delves into the fund board’s report to analyse issues with some multi-manager funds and what might happen next.

The FCA is keen to get asset managers to properly assess the profitability of their fund ranges, reports Ignites Europe’s Ed Moisson (subscription required). It is concerned that some boards have misinterpreted what it wants. FBC members can access an in-depth interview with four leading figures from the FCA, covering this and a range of product governance topics, on the website here.

Ignites Europe highlights concerns over a lack of integrity on fund boards in this article (subscription required). The report draws on findings from FBC’s recent iNED survey, which is available here.

Climate conundrum

Regulations relating to climate change are coming thick and fast, it seems. The EU introduced the Sustainable Finance Disclosure Regulation in March, and earlier this month the FCA outlined its schedule for the next few years – including new reporting rules for asset managers, reports FTAdviser.

Women in Investment Awards

FBC is proud to announce that founder and managing director Catherine Battershill has been nominated for Investment Week’s Women in Investment Awards. We’re delighted that Catherine’s hard work has been recognised. Good luck to all the nominees.

Research update

FBC’s Research Bank is regularly updated with new white papers and reports from around the investment industry with a particular relevance to fund boards and iNEDs.

The Investment Association: Value Assessment Reports – Analysis and Initial Recommendations

The asset management trade body has published its first in-depth study of AoV reports, covering 71% of UK funds by assets. It focuses on the investment manager perspective with a number of recommendations for improving output and accessibility.

FBC takes no responsibility for the accuracy or quality of the news in the links provided above, and nor are the views and comments representative of FBC or its members, unless expressly stated. In some instances, as indicated, a subscription is required to access certain news articles, and content stored on the FBC portal is freely accessible for FBC members.