Skandia shows its hand in fund group negotiations

WealthSelect, a restricted range of popular funds from ten external groups run as mandates for Old Mutual, launched in February. The funds are used to populate a suite of 64 model portfolios run by Stuart Clark. Unlike funds with a clean pricing model, the segregated mandate structure allows the firm to profit from its negotiations with fund groups, effectively allowing it to offer a free DFM service. The aggressive nature of WealthSelect's pricing - at a cost of between 66bps and 83bps, it is well below that of rival model portfolio providers - has led to suggestions the firm is runn...