Eight fund groups on UK Skandia’s restricted panel
Skandia in the UK, which is part of Old Mutual, has agreed a deal with eight external fund groups whose funds will feature in its restricted panel.
Old Mutual Wealth CEO Paul Feeney is concluding negotiations with fund houses over the creation of a core solutions range the group is preparing to unveil as its key play in the post-2012 restricted advice market.
Feeney himself (pictured) has led negotiations with fund houses as the group’s platform – to be rebranded next year – selects its partners to run specific core mandates under the Old Mutual Select brand.
The eight groups on the main panel are as follows:
• BNY Mellon
• JP Morgan
Old Mutual Global Investors is also on the panel as the ninth group.
Skandia said the agreements are still subject to contracts being signed, but verbal agreement has been reached with the fund groups.
It said there will be around 50 funds in the new range, which will be run as sub-advised retail mandates.
M&G will also feature in the range but will be a strategic partner rather than full partners, with a view to joining later.
Skandia said: “M&G has been a key partner of Skandia for many years but at this time M&G is unable to provide sub-advised retail mandate services.
“In light of this, Skandia has agreed that M&G will be a strategic partner and the two companies will work together to find a solution that will enable M&G to join the new fund range at some point in the future.”
It means a number of major fund houses – including Jupiter, Artemis, Invesco Perpetual, Standard Life Investments, and Franklin Templeton – will be absent from the final line-up.
The new range will be offered exclusively via Skandia in the UK and will be available on the Skandia Investment Solutions platform in addition to Skandia’s existing open architecture range and its packaged solutions such as the Spectrum risk-targeted funds and the new Generation income solutions.
While the range is targeted at the restricted market, it will also be available to independent advisers in the UK post-Retail Distribution Review (RDR).
“I have personally led negotiations on the development and launch of this product,” Feeney told analysts last week.
“It is a means of delivering to the market our own investment range, where the components are provided by our own asset management business but also some of the other best investment managers in the world here in the City.
“It enables a lot of our distributors – IFAs, advisers who are open or restricted – to build their own portfolios with solutions from the best managers that it would be very difficult for them to get if they went direct, if not impossible.”
Investment Week reported in September that Old Mutual was seeking to take 45bps of a fund’s typical 1.5% management fee in return for offering the funds on Select.
“One of the impetuses in creating Select is that we have to build greater margin through our platforms. That means capturing our own investment solutions – which means it has to be our products, our funds. When we are bringing external investment managers in, it has to be on a sub-advisory basis,” Feeney said last week.
In exchange for surrendering margin, fund groups joining the panel are also understood to be receiving pots of institutional money to run from Old Mutual Wealth’s life book.
Though the negotiations have been finalised, Feeney said the new offering will not be rolled out for another six months.
“Select will be mid-year next year. We have to help advisers over the RDR bridge into the new world [first],” he said.
This article was first published on Investment Week