Prudential cuts management fees, introduces performance discount

Pieter Hugo, MD of Prudential Unit Trusts

From 1 December 2019, Prudential Investment Managers will be reducing their Annual Management Fees (AMF) by between 0.20%-0.25% p.a. across a range of their unit trusts which will directly benefit client returns. This will include clients invested via investment platforms.

In addition, they will be introducing a new 0.25% p.a. discount on the base AMF for the Prudential Dividend Maximiser and Prudential Equity Funds should the fund performance (net of fees) fall below benchmark.

As Pieter Hugo, MD of Prudential Unit Trusts, explained: “We are committed to providing our clients with an offering that delivers excellent value for money, is competitively priced and aligned with the changing regulatory environment. To this end, we regularly review our product range to ensure that our offering remains relevant and ideally positioned to deliver the best possible outcomes for our clients.

“During a recent review we identified some fund classes where we felt our fees weren’t ideally positioned relative to comparable offerings in the market. While we believe these funds still provide excellent returns net of fees, we have decided to reduce our AMF to ensure their ongoing competitiveness. We are very pleased to be able to offer fee reductions of between 0.20%-0.25% p.a. across a range of funds and fee classes.”

He added that, as part of their review, Prudential had also recognised the need to keep abreast of the expected changes to adviser fee payment methods as outlined in the FSCA’s Retail Distribution Review (RDR). As such, the group would be restructuring the way adviser fees are currently paid from the AMF of the A classes of some of their funds, applicable only to new business placed directly with Prudential effective from 1 December 2019.

“We believe that these changes are in the best interest of our advisers and clients, and will help to ensure that we continue delivering value for our clients,” noted Hugo. “As the investment management industry keeps raising its standards of transparency and fair treatment for clients, we aim to stay at the forefront of these improvements. At the same time, we are ever-mindful of costs, and our goal remains to be to provide clients with excellent long-term investment performance after fees, as well as outstanding client service.” The table shows the affected Prudential funds and fee classes that will benefit from AMF reductions.

All fees are annual and exclude VAT.
*An additional performance fee is charged if specific performance objectives are met.