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AoV-led transfers result in 50% discount for UK investors

ValueUK retail investors have seen their fees halved when moved from so-called ‘legacy’ to clean share classes as a result of the Assessment of Value (AoV) regime, according to Fitz Partners.

The UK-based research firm has tracked the movement of retail investors over the last year from retail share classes charging trail commissions to ones with lower fees.

Using asset managers’ AoV statements, Fitz found that savings ranged between 24% to 67% with an overall average of 49.24%.

Fitz also found that over half (51%) of asset managers have transferred their retail investors into cheaper fund units following publication of the first round of AoV reports.

The AoV regime was brought in by the Financial Conduct Authority in 2019 to put more onus on fund boards to scrutinise how much value investors get from their funds.  

Transfers between corresponding share classes resulted in discounts of exactly 50% whereas investors moved to vehicles offered specifically to fund managers’ direct investors received a smaller discount of 40%.

According to Hugues Gillibert, Fitz Partners chief executive, the findings show “a very positive trend” and “one which will benefit the UK retail investors”.

Gillibert added that the AoV is “still very much a work in progress” and that he expects to see more happening in the second year of the AoV regime.

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