Investments  

Pictet slashes prices in UK strategy rethink

Pictet Asset Management is aiming to become the first Europe-based fund manager to successfully break into the UK market in years following a wide-ranging pricing and strategy overhaul.

The fund management arm of Swiss private bank Pictet & Cie has rolled out cut-price institutional share classes, which will be available to retail investors via key platforms. Many of these share classes undercut so-called ‘super clean’ prices announced by direct platforms in recent weeks.

It has also refocused its marketing efforts on just five products in a bid to gain assets from UK advisers and discretionary managers.

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Several European fund management groups have announced plans to launch products into the UK retail market in the past two years, but none have so far gained much traction with advisers.

French investment giant Carmignac Gestion added sterling share classes and listed its funds in IMA sectors in 2011, but has been hampered in its efforts to raise assets in the UK by a combination of poor performance and difficulties in listing its products’ unusual structure on UK platforms.

In addition, Spanish firm March Gestión, French distributor Natixis, Scandinavian companies Skagen and Nordea and Swiss fund manager Mirabaud are all seeking to gain traction in the UK – but Pictet is still the only company among the recent arrivals to have successfully listed most major platforms, now a crucial path to the retail market.

Pictet’s latest move follows a pricing review by head of UK sales Paul Gaston last year, revealed by Investment Adviser, as several products that had been added to platforms in the past three years had some of the highest charges in the IMA sectors.

“We’ve made sure that our range of funds is very much in line with or better than the pricing of UK-based equivalents,” Mr Gaston said.

Four of the funds have annual management charges of 0.6 per cent, significantly below the industry norm of 0.75 per cent and even some discounted prices negotiated by platforms.

“There are lots of different pricing methods and different market rates. We have been waiting to see what the platforms would do,” Mr Gaston added. “There is going to be more divergence in price from what has been the standard. Some groups may offer discounts to attract assets to certain funds they want to promote, which I think is a fantastic thing for competition.”

Although Pictet has sterling share classes for more than 40 of its Luxembourg-based products and has listed 20 in IMA sectors, Mr Gaston said the firm would now be focusing its efforts on promoting just five to advisers and wealth managers: Pictet Japan Equity Opportunities, Pictet Water, Pictet High Dividend Selection, Pictet Emerging Local Currency Debt and Pictet Small Cap Europe.

Will Pictet’s new prices put more pressure on its UK counterparts?

Aj Somal Chartered financial planner, Aurora Financial Planning

“Competition is a good thing and it is a very competitive environment. If a company is reducing charges, it puts pressure on other firms to follow suit. It will be interesting to see the take up – how much money flows into the offerings. Firms will be monitoring flows and seeing if it is successful.