22 Jun Alliance Trust Claims Fees Will Decrease Post-RDR
According to the FTAdvisor
the managing director of Alliance Trust, Edward Troughton, has claimed that the introduction of the Retail Distribution Review (RDR) will signal a period of massive change in the asset and fund management markets.
However he also believes that the RDR will drive down fees. He commented on the new measures at a recent event to mark the first Alliance Trust's Monthly Income Bond Fund. He said "We support the RDR wholeheartedly, particularly the need for transparency as we have as an industry become too opaque. We want to make sure that we try and listen to what the end investor is asking us."
He comments that greater transparency will be one of the main reasons for the fee drops, continuing "You can't pick up a paper without seeing 'fees are too high' and we agree with that. The RDR will shake the industry out of its apathy and undoubtedly fees will come down.
"A structured performance fee is the way to go we believe but you need to offer clients choice in that."
However the company have confirmed that they have yet to agree a pricing strategy for the post RDR period themselves. Rod Davidson and Gareth Quantill, managers of Alliance Trust's Monthly Income Bond Fund, claim such a strategy is dependant on the choice they can offer to investors.
Davidson commented "We have about 27 different share classes so we have given flexibility there.
We have a share class with an annual management fee of 20 basis points, which I think is unique.
"In previous lives it m ay h
ave taken more than a year to unwind a position. We are now able to get out of a trade immediately. As the credit cycle moves we would anticipate we could outperform as we can dodge those deteriorating credit stories."