Skandia is planning to seed its new ‘Select' fund range with substantial institutional money from its life book in exchange for groups surrendering margin to join the exclusive panel of funds.
Skandia will shortly announce the names of the 50 funds which will populate its Select range. The names of ten fund houses that have signed up to the deal have already been revealed.
Skandia is planning to plough the life money into its new Old Mutual branded portfolios next year, in order to swell their assets.
Skandia will convert client money already invested in the 50 funds via its life funds over to the new Select range, using the assets as seed capital.
Paul Feeney (pictured) CEO of wealth management at Old Mutual, is personally overseeing negotiations with fund groups.
A spokesperson for Skandia confirmed the company's life money will be transferred into funds that will then be run in the same style as the external managers' existing portfolios.
In the first quarter of next year Skandia will write to clients outlining the changes.
"We will be writing to advisers and customers early next year to notify unitholders of our plans to move their money over to the new version of the fund," said Skandia.
"We will move money only when the fund is in essence the same, run by the same manager with the same investment process, to ensure there is no detriment to the customer."
For example, if included in the list, Invesco Perpetual's High Income fund would likely become the Old Mutual Wealth Select Invesco Perpetual High Income fund.
The move means the Select range will be labelled in a similar way to the St James's Place fund range.
The Select fund panel, first revealed by Investment Week last month, will cover all major asset classes, according to Skandia, and will be targeted at restricted advisers.
Skandia's move is part of a plan to reinvent its business as a solutions provider. The company has the benefit of being able to use its scale to negotiate discounts, with which it hopes to attract a raft of restricted advisers to the platform.
However, the fund range will be open to all advisers, and not just restricted intermediaries.
The new range will be offered exclusively via Skandia and will be available on the Skandia Investment Solutions platform, in addition to Skandia's existing open architecture range.
However, a spokesperson for Skandia said the group is still in discussions over how to roll out the proposition.
Skandia will also continue to run packaged solutions such as the Spectrum risk-targeted funds and the new Generation income solutions.
In return for gaining a place on the core solutions panel, the Skandia platform is understood to be taking up to 45bps from the standard 1.5% AMC from any fund that makes it on to the core Select range, a substantial increase on its current margin.
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