True Potential is launching a range of low-cost passive funds, in a bid to mirror successes its new American private equity investors have witnessed in the US.
In January, True Potential announced a “significant” investment from FTV Capital, which has bought a minority shareholding in the Newcastle-based network.
True Potential managing partner David Harrison said the private equity investors had highlighted several themes already well developed in the US.
“When it comes to some of the directions that the UK market seems to be going in, the US is already there. There is big pressure in the US over costs,” he said.
If we don’t make any money for the client, we don’t charge our investment management fees. David HarrisonBrad Bernstein, managing partner at FTV Capital, who now sits on the True Potential board, said cost was already a big issue in the US.
“The US is far ahead in the cost of asset management products. We think that over time there is going to be much more pressure, much more focus on low cost, better value asset management products for clients,” he said.
Adviser View
Andrew Whiteley, a financial adviser with Hertfordshire-based Provisio Wealth Management, said: “I would agree that the move towards low-cost funds is one that will continue to gather pace, but I don’t think it is necessarily an active or passive argument. Clients are not going to argue against paying lower fees.”
