Skandia shows its hand in fund group negotiations

Skandia has negotiated an average deal of 40bps to 45bps for funds in its WealthSelect panel, Investment Week can reveal

WealthSelect, a restricted range of popular funds from ten external groups run as mandates for Old Mutual, launched in February. The funds are used to populate a suite of 64 model portfolios run by Stuart Clark. Unlike funds with a clean pricing model, the segregated mandate structure allows the firm to profit from its negotiations with fund groups, effectively allowing it to offer a free DFM service. The aggressive nature of WealthSelect’s pricing – at a cost of between 66bps and 83bps, it is well below that of rival model portfolio providers – has led to suggestions the firm is runn...