Jupiter is to stop collecting 'box profits' from its funds after a year in which it reported £1bn of net inflows, driven almost entirely by its international operations.
Jupiter is to stop collecting 'box profits' from its funds after a year in which it reported £1bn of net inflows, driven almost entirely by its international operations.
The fund manager’s full-year figures showed assets increased to £40.5bn by December 31 2016, up from £35.7bn a year earlier.
Chief executive Maarten Slendebroek, stated the net inflows were “encouraging given the challenging market environment”.
Mr Slendebroek added that the firm plans to shift its unit trust range to a single price for buying and selling fund units.
The move, which will effectively eliminate so-called box profits, will result in a £12.8m hit to 2018 income.
Investment Adviser highlighted last year that the FCA had proposed taking sterner action on box profits, which relate to revenues stemming from investors buying and selling funds at different prices.
The regulator proposed that “risk-free” versions of these profits should always be paid back into funds rather than added to the company’s bottom line as part of its asset management market study.
Jupiter said it would also pay for broker research itself, rather than charge investors, in advance of Mifid II rules which unbundle research from dealing commissions. The move will add £5m in costs.
Mr Slendebroek added: “We will also take a consistent approach to the costs of research we use, by taking it all through Jupiter’s accounts from 2018 with no change in the management fee, adding around £5m of costs from 2018. During 2017, we will work with our service and research providers to implement these changes. These are important steps in simplifying our unit trust pricing structure as we diversify and grow.”
