Aberdeen Asset Management has become the latest fund manager to fix a range of operating charges across its fund range.
The asset manager has proposed to fix the operating, administration and servicing expenses on its funds, which are not included in its annual management charge but are included in the broader ongoing charges figure, which encompasses more costs.
From February 1, the operating expenses will be fixed “as close as practicable” at each fund’s rate at the end of January, which Aberdeen said was less than 0.2 per cent on most of its funds.
The fixed charge will be reviewed annually and could be raised or lowered but will not exceed a maximum cap of 0.3 per cent on all but three funds
The Aberdeen Emerging Markets Equity, Aberdeen Latin American Equity and Aberdeen Eastern European Equity funds will have a slightly higher fixed fee.
The fixed fee will not include any charges related to transactions or “exceptional legal, business or tax expenses”, broker commission or charges such as stamp duty.
But it will include fees payable to the depositary, custodian, registrar and auditors, as well as regulatory fees and documentation such as annual or interim reports.
Aberdeen said it would pay the excess if costs rose above the fixed level, but added it would retain any profit if the costs come in below the fixed fee. It can also move the fee if it wishes but shareholders will be notified.
It will also introduce a stepped discount on the operating fee, which will see the charge reduced based on how large the relevant fund is, with a maximum discount of 4 basis points for any fund with more than £2.4bn in assets.
Earlier this month Old Mutual Global Investors proposed a similar fixed cost for its additional expenses, which would effectively fix the OCF on its fund range.
As the debate around cost transparency in the fund management industry rises, the Financial Services Consumer Panel has also stepped in to propose a single charge that would incorporate all the costs of investment, including transaction charges.
