The rain has stopped, the sun is shining and it feels as though we’ve got through the worst of the weather. It’s half term so half of the industry is away and so it’s been a quietish week. We Fundscapers were bogged down in our various quarterly/year-end reports until Old Mutual gave us something to think about.
The group announced its new solution two weeks ago, but it was only today that it published the details of the WealthSelect fund range and the AMCs. There are 20 sub-advised funds from 10 fund managers. Being a bit of a nerd, I added up them up and worked out that the average was 58bps and not 52bps, so I can only assume that Old Mutual funds have also been included in the 52 bps calculation.
In theory, everyone’s a winner. Advisers get access to a balanced fund range at cheaper prices. Check. Fund managers get distribution in exchange for lower AMCs. Check. Old Mutual can use fund revenues to offset platform costs. Check.
For those of us forced to get round London in the awful weather and no tube network, what a nightmare week! On the financial services front, it was fairly quiet until Old Mutual Wealth announced its new fund range and portfolio management service yesterday afternoon and then the twitterati got busy. Old Mutual Wealth includes two separate businesses — the Skandia platform and Old Mutual Global Investors (OMG), the fund manager arm.
Prior to RDR, the platform was able to wrestle some pretty good rebates out of fund managers, but in the post-RDR world, securing the same kind of pricing from fund managers was likely to prove a challenge unless the platform could demonstrate that it had distribution influence. But even more important was securing distribution deals for its in-house fund manager, OMG. As a result, a combination of the Skandia platform plus a range of well-priced, sub-advised funds and solutions targeted at cost-conscious advisers became the strategy. The message is clear: we are a one-stop shop for restricted advisers.