IA zeroing in on primary share classes

The Investment Association has announced it is taking a new approach to primary share classes.

IA zeroing in on primary share classes


Following consultation with data providers Financial Express, Lipper and  Morningstar, the IA has decided to move to new primary share class identifications suitable for the post RDR environment.

These will be the highest charging unbundled share classes, free of rebates or intermediary commission. They will be ‘freely available’ through third party distributors in the retail market, the IA said.

After a collection and test period, a date will be announced to make the transition.

The RDR introduced a number of challenges for the presentation of performance data due to the increase in different share classes available for each fund, according to the IA.

The IA said this new approach is designed to ensure that there is a consistent approach by the industry to choosing the primary share class that the data providers can use to prepare and present performance information to financial advisers and their clients via ranking tables and sector averages.

The issue of historic track records is also being addressed by the IA, as it says most RDR share classes have only been in existence since late 2012.

“It is important for there to be a consistent basis available to retail consumers and their advisers to compare funds,” said Jonathan Lipkin, IA director of public policy. There are no easy answers but the route being announced today is intended to reflect the most common consumer experience.”

A copy of the full paper is available to download here.