Fundscape and the Pridham Report have jointly published the Definitive Guide to the UK Fund Industry 2015, covering all aspects from fund manufacture to distribution.
Despite predictions to the contrary, two years after the Retail Distribution Review (RDR) was introduced, the UK’s fund industry is flourishing. It is now the largest domestic market in the Europe with assets of £753bn, and is larger than the domestic fund markets of Switzerland, Germany, France and Italy.
Further expansion is predicted. Low interest rates, the rising number of baby boomers and the pension freedom that comes into force in April will help to fuel growth. Five-year projections with pessimistic, realistic and optimistic scenarios have been produced in the guide. Bella Caridade-Ferreira, CEO of Fundscape said “UK fund industry assets will skyrocket on the back of this unique combination of factors. Our realistic scenario sees assets rise to £1,449bn by 2019, a compound annual growth rate of 12.8%. In the optimistic scenario, 2019 assets could be in the region of £1,773n. Or even higher.”
It’s been very busy in the D2C platform world and competition is hotting up as the April deadline for unbundled platform pricing approaches. Hargreaves Lansdown was the first to announce its post-RDR charging structure and was followed by Fidelity, Barclays and a host of other discount brokers and direct platforms in the days and weeks that followed.
The lang cat’s price comparisons are comprehensive (latest update at http://langcatfinancial.co.uk/blog/cut-price-fruit-russian-oligarchs-gary-coleman/) so I’m not going to reinvent the wheel, apart from pointing out the outliers. These include a pretty expensive Chelsea, which announced its charge of 60bps (which includes the Cofunds fee of 20bps) and Barclays at 70bps for £5k but tiering down quickly to 35bps from £10K. At the other end, Charles Stanley Direct is one of the cheapest for the modest end of the market with a fee of 25bps up to £250K and then 20bps from there upwards. In a bid to attract customers from other platforms, it will also waive the platform charge for a year for all new money and transfers to its platform until 1st April 2014.