The FTSE 250 asset manager said it had been contemplating changes to its unit trust pricing since early 2016 but had now decided to make the “proactive decision” to switch to a single pricing system for buying and selling fund units, effectively removing “box profits” from its 2018 income.
In recent years, several large UK asset managers, including BlackRock, Legal & General Investment Management and Jupiter, have come under fire for pocketing these box profits resulting from the bid/offer spread.
Jupiter’s box profits gave the group an additional £12.8m in 2016.
Additionally, the asset manager announced it would bear the costs of external bank and brokerage research payments from 2018 with no change in the management fee. It estimated this would add around £5m of costs.
The planned changes from Jupiter come at a time when the industry is having increasingly heated conversations around fees and governance, sparked by an interim report form the FCA released in November of last year.
On the FCA’s report, Jupiter chief executive Maarten Slendebroek remarked: “It was a thoughtful study and we welcome the push towards transparency in fees and focus on client value.
“We must await the final report to determine how to respond further to the transparency objective and whether this is in the form of a combined fee, as outlined in the interim report.”
Jupiter’s proactivity in addressing many of the criticisms highlighted in the FCA’s report aside, its full year results were not well received by the market.
