Insurance giant Legal & General looks set to increase its annual management charge on its Fixed Interest Fund from 0.5% pa to 0.75%pa according to industry newspaper Money Marketing.
L&G claim that this change reflects the real cost of managing an active fund that invests in Corporate and Government debt (Coporate Bonds and Gilts).
Our view
Even at 0.75% pa, the charge is still extremely competitive compared to most other investment fund managers. Legal & General have consistently charged lower management charges than many others.
Given the pressure that investment managers are under as overall that value of funds have dropped and therefore the size of their fees have dropped (as they charge a % of fund values) this is no surprise.
Expect more fund management charge increases from others.