Invesco Perpetual has made a major change to its charging structure across its range of funds, scrapping the annual management charge in favour of a single charge which encompasses all costs.
IFAonline's sister title Investment Week can reveal Invesco Perpetual has created a new charge encompassing the management of the fund, administration, and fund governance charges.
The move is in line with recent comments from the Investment Management Association (IMA), which has been pushing for a total cost of ownership figure.
This fund management fee (FMF) is equivalent to the ongoing charge quoted in the Key Investor Document, and will replace AMCs on Invesco Perpetual's funds from 1 April.
The only additional costs - which cannot be added because they are historic - will be trading costs which will be applied separately.
The move by one of the largest fund groups in the marketplace to dramatically revamp its fund charges could pave the way for smaller providers to follow suit, as the industry rethinks its pricing models for the post-RDR world.
Ian Trevers (pictured), head of UK retail at Invesco Perpetual, said the changes would help to simplify the overall cost for end investors.
"We think the days of AMC comparisons are numbered. We are pleased to take a leading position in responding to investors and making charges easier to understand," he told Investment Week.
The changes mean Invesco's typical 1.5% AMC on an equity fund will vanish and be replaced with an ongoing charge at around 1.69%.
However, the prices of the funds are not going up - the new FMF simply includes all the existing charges which already come out of the fund after the AMC has been taken away.
Trevers added Invesco had spoken to the regulator when devising the FMF. He said: "It is consistent with their direction of travel."
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