Virgin Money cuts fee on flagship tracker

Virgin Money cuts fee on flagship tracker

Virgin Money has cut the fee on its UK tracker fund from 1 per cent to 0.6 per cent.

The fee has prompted criticism for some time, but some have maintained the new price is still too high.

Virgin Money said it would be notifying clients of the changes on the Virgin Money FTSE All Share fund and its Virgin Money Bond and Gilt fund, both of which will have a fee of 0.6 per cent, instead of the previous 1 per cent.

Mark Polson, principal at consultancy firm the Lang Cat, said he still thought the 0.6 per cent fee on a UK tracker was uncompetitive.

He said: "No one should pay more than 0.5 per cent for a tracker fund, including the platform charge."

The IShares UK Equity Index fund, which is the cheapest on the UK market, charges 0.06 per cent as a management fee, but investors then pay separately for the platform of their choice.

Aberdeen Asset Management is taking over as manager of the fund, having entered into a joint venture agreement with  Virgin.

A spokesman for Virgin Money said: "We review pricing on a regular basis, and if there are any changes we will communicate those to customers at the appropriate time."

Paul Gibson, an adviser at Granite Financial Planning in Aberdeen said: "Charging 1 per cent a year for a tracker was daylight robbery. A reduction to 0.6 per cent is an improvement but still pinching your wallet. Still too expensive and to be avoided."