Fund fee innovation, not price, will give groups the edge

Marketing and distribution methods need to change

Fund fees have rarely been out of the headlines for the past decade, since preparations for the Retail Distribution Review (RDR) were underway, putting cost cutting and transparency at the top of providers' and distributors' agenda.

Since the RDR took effect in 2012, fees have continued to be under the spotlight due to further regulatory pressures (MiFID II, PRIIPs, etc) and the rise of passive investing. Is the tide finally turning for fund fees? Fund providers' cost-cutting exercises have led to Boston-based Fidelity Investments launching the world's first zero expense ratio index in August, but the focus on fees must now extend beyond a race to the bottom, with the onus on asset managers to demonstrate innovation. A recent report by global research and consulting firm Cerulli Associates, The Cerulli Edge - ...