Asset manager True Potential has launched a new fund range that will include a unique fee charging mechanism, based on a share of growth generated annually.
The five new funds, which have been approved by the Financial Conduct Authority, will have an Ongoing Charge Figure (OCF) of 0.6 per cent. The share of growth fee will be set at 10 per cent of the increase in value generated over a 12-month period, including a high-water mark set annually.
The funds are managed by the firm’s in-house investment management team and use a mixture of passive investments from HSBC and active funds from BMO Global Asset Management.
The addition of these two global asset managers complements True Potential’s existing eight investment partnerships with UBS, Allianz, Goldman Sachs, Schroders, 7IM, SEI, Columbia Threadneedle and Close Brothers.
Mark Henderson, Senior Partner at True Potential, says: “This asymmetrical fee arrangement aligning the investment manager with the client has been a long-held aspiration for us. Simply put, if we do not see growth in the year we do not charge a share of growth fee.
“This is a unique arrangement in the market and demonstrates our commitment to innovation and providing clients with true value for money.”
Over GBP7 billion is already invested in True Potential’s existing fund range and the firm has more than GBP52 billion under its administration.
The high-water mark will be calculated annually and based on the higher of the price at the start of the fund accounting year and the price at the end of the accounting year which is 30 April.
The new funds are available to clients through the 20 per cent of UK financial advisers who use True Potential’s technology and investments as well as direct-to-consumer site True Potential Investor.
