Standard Life in shock increase of fund fees
The Edinburgh-based fund manager, which controls some 157bn, said annual management charges will rise by ten basis points on two equity funds alongside smaller hikes to five bond funds, in an e-mail sent to financial advisers.
The move defies mounting pressure on fund managers to trim fees, driven by competition from passively managed investments and investor discontent after the financial crisis.
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Hide AdThe head of marketing at one global fund manager said: "I'm surprised because it's quite hard to do anything that doesn't look consumer-friendly these days."
Jacqueline Kerr, head of wholesale at SLI, argued that the bond funds remained cheap compared with competitors while higher charges on two equity funds reflected their popularity.
Financial advisers played down expectations that more fund managers could follow with higher fees.
"Is this opening the floodgates for many others to copycat? I have my doubts," said Tom Biggar, head of investments at TQinvest. He conceded that "it was never great news" when fund managers raised their charges but the rises were minimal and mutual fund fees would remain under pressure.
"I think there's just too much competition out there from trackers and ETFs (exchange traded funds]."