FCA prompts UBS and True Potential fees revamp
The charging structure within the suite of low-cost multi-asset funds by True Potential Investments and UBS Asset Management has been redesigned following advice given to the firms by the Financial Conduct Authority.
UK-based platform True Potential and investment giant UBS announced in a joint statement today that it has made the True Potential UBS Fund Range available for investment, with five new funds priced at 0.60% and minimum investments, as low as £50.
In partnership with True Potential Investments, UBS will provide the investment expertise to actively manage the funds, the statement said.
And True Potential and UBS has also confirmed to International Investment earlier today that following FCA advice, the funds have been redesigned from their original format.
In January True Potential announced a deal with US firm FTV Capital wherein it bought a minority shareholding in the Newcastle-based network and in May it revealed that it was launching a range of low-cost passive funds that were originally set to have a variable price.
Change of structure
Daniel Harrison, senior partner at True Potential, explained the change of structure. He said: “We had intended to add a variable fee feature, but at the suggestion of the regulator we have removed this from the initial launch. The FCA’s view was that a variable fee linked to targeted returns and fund costs is too difficult a concept for retail investors to grasp.”
Harrison added that the firm was happy to deal with the FCA in this way and would “look to engage with the regulator again in the future”.
The True Potential UBS Defensive, Cautious, Balanced, Growth and Aggressive funds, available to investors now, are aligned to individual risk profiles defined by independent risk-rating expert, Morningstar, and aim to deliver the appropriate balance of risk and return.
Each fund will be actively managed within its risk banding to navigate changing markets, seeking to manage volatility and capitalise on opportunities for growth, the firms said in the joint statement issued today.
Mark Henderson, senior partner at True Potential Investments, said: “By using the investment expertise, precision and heritage of UBS, alongside our philosophy of providing low-cost funds with low minimum investment amounts, we have produced a range of funds that adapt to the market.”
Richard Lloyd, head of portfolio management, research & risk, investment solutions at UBS Asset Management, said that the funds are globally-diversified across and within asset classes incorporating the firm’s “next generation ‘smart-beta’ funds to achieve smarter, low-cost implementation and strive for better outcomes for clients”.