Invesco Perpetual have boldly gone where no other fund manager has gone before, by abolishing annual management charges and replacing them with a single ongoing charge inclusive of registration fees and fund administration costs.
From 1st April, investors in funds managed by Invesco Perpetual will see the annual management charge replaced with a fund management fee, designed to make it easier for investors to understand the costs of the funds in which they invest.
The new fund management fee is the same as the ongoing charge already quoted in the Key Investor Information Document (KIID) for investors in these funds.
The fund management fee will cover the management of the fund, maintaining the share register, fund governance and administration (including services such as custody and audit).
Portfolio Transaction Costs will continue to be applied separately as they cannot be predicted in advance.
Invesco Perpetual stress that this change in disclosure of fund charges will not lead to any price increases.
However, investors might be initially surprised to see a typical annual management charge of 1.5% become a fund management fee of around 1.69%.
This is how Invesco Perpetual has been disclosing their fund charges until now:
From 1st April, their fund charges will be disclosed as follows:
Where the costs of managing a fund change, Invesco Perpetual have assured investors they will provide at least 60 days’ notice.
We expect to see every other fund provider follow this approach shortly, as our regulator, the Financial Conduct Authority, is keen to see less complexity when it comes to investment fund charging.
As we often tell our clients, price is only one consideration when investing money; it essential to consider value and other factors as well.
