The new share class is designed for retail intermediaries and is clean of trail commission, but it has not – like many other fund houses’ RDR-ready offering – stripped out the 0.25% platform rebate.
As well as its ‘R’ (retail) share class, M&G has also extended its range of ‘I’ (Institutional) share classes to most of its funds, with a typical AMC of 0.75%.
The ‘I’ share class will be available to those investors with a typical minimum investment of £500,000 and will be available via platforms.
Meanwhile, the ‘R’ share class, which still has platform rebates bundled into it, would have to be revisited if the FSA’s final guidance on platforms bans rebates from January 2014.
From 1 January 2013, new advised business received directly from an intermediary will go into the new R share classes clean of trail commission. But legacy business will remain in the A or X share classes that pay trail commission.
How it compares
Jonathan Wilcocks, managing director of global retail sales at M&G Investments, said: “We’ve responded to the demands of the market by providing over 130 new share classes across our funds. This gives our wide and varied customer base maximum flexibility.”
Last month Fidelity made a similar claim when it launched an unbundled share class for discretionary clients investing £500,000 or more and offered the “platform-using community” of IFAs a 1% share class in absence of final guidance on rebates from the FSA.
But these asset management giants are still within the minority, with most fund houses opting to offer a completely ‘clean fee’ share class in expectation that platform rebates will be disposed of in 2014.
Cazenove, Schroders, Baillie Gifford and Henderson are among those to have announced plans to offer entirely unbundled share classes across at least some of their fund range.
