Fund buyers warn new Fidelity charging model 'may not deliver for investors'

New structure effective March 2018

Jayna Rana
clock • 8 min read

Industry commentators have praised Fidelity International for "taking the lead and being the first to think about a different fee structure" as the group unveils further details of its new 'fulcrum fee' model, but warn it could be "difficult for investors to get their heads around" while they could end up paying more for outperformance.

Fidelity announced in October it would be introducing a variable management fee model alongside existing pricing structures, as pressure mounts for active managers to prove their worth against passive rivals, align their interests better with those of clients, and introduce more innovative fee structures. This week, the group revealed further details of the new 'fulcrum fee' structure, including a 0.10% reduction to its annual management charge and a variable fee to move between -0.2% and +0.2% of the AMC depending on performance. The model will initially be launched on 1 March 2018 a...

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