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30th January 2015

Schroders

Schroders announces an increase in the ongoing charge figure for the Elite Rated Schroder Recovery fund, but you could pay less

Schroders has announced that it will be increasing the ongoing charge figure (OCF) for the Elite Rated Schroder Recovery fund, in order to bring it into line with the costs of other funds in their range. The OCF will rise from 1.51% to 1.66% on 15th February 2015.

However, the rise will only apply to the old bundled share class, or in other words, investments made before April 2014.

Bundled and unbundled pricing

Prior to this date, across the whole of the investment industry, the fund management fee, platform fee and intermediary service fee were all ‘bundled’ together and investors paid one annual charge. Following a review by the Financial Conduct Authority (FCA), as it is now known, it was decided that these charges should be ‘unbundled’ in future to increase the transparency of these charges. So, any investments made after 5th April 2014 were charged under the new structure.

Unless a client moves their previous investments to the new charging structure, they will remain in the bundled structure until April 2016, when they will be moved automatically.

How you can reduce your investment costs

One of the results of the FCA review was increased price competition from both platforms and service providers. It is therefore in your interests to compare the old and new pricing levels of your platform and intermediary to see if you would be better off converting your Schroder Recovery investment to the new structure sooner rather than later.


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