JPMAM - pioneering pricing reforms take effect 1st September

Following the announcement made to its shareholders at the end of June 2007, JPMorgan Asset Management (JPMAM) is to change its pricing structure across its UK OEIC range* from 1st September 2007. This historic move will offer transparency, simplicity and consistency across JPMAM’s UK OEIC offering in an industry which has, in recent years, spawned over-complicated charging structures. The move, which is JPMAM’s first charging review in over 10 years, is consistent with the FSA’s recent Retail Distribution Review, has been planned to be consistent with MiFID and will allow IFAs to make clearer choices around how they charge for their services.

Transparency – from 1st September 2007 JPMAM will fix the other & administrative expenses on its ‘A’ shares at 18 basis points, irrespective of the asset class, across its entire UK OEIC range.* Currently, these expenses differ widely from fund to fund and from fund house to fund house. They are also set retrospectively and with significant variation. JPMAM is therefore making its total expense policy clearer and simpler to investors and intends to review this policy regularly. The new fixed expenses have been set in line with the current industry average.

Reviewed Initial Charge – The initial charge on most ‘A’ shares is to be reduced from 5.5% to 4.25%, giving JPMAM’s direct investors the ability to access the funds at an average industry cost, whilst those funds with a lower initial charge at present, will remain unchanged.

Greater Choice –By introducing a new range of ‘B’ and ‘C’ shares, JPMAM will give clients the ability to access the same funds at lower fees depending on the size of their investment. In addition, all existing ‘C’ shares, currently available to some larger investors, are to be re-named as ‘I’ sharesasUK retail investors often have very different requirements to their institutional counterparts. The pricing structure of ‘A’ shares will remain the same - with most having an annual management charge of 1.5% per annum. The new ‘B’ and ‘C’ shares will mainly be priced at 1% and 0.75% per annum respectively.

Regulatory Change

The RDR and MiFID will undoubtedly bring with them widespread changes across the UK investment industry, two of which are likely to be the issue of transparency and that of trailer fees. JPMAM has made the pioneering move to address their clients’ needs now. The OEIC pricing reforms are one example of how committed JPMAM is to delivering the very best, not just in performance, but in value and service terms, to existing and potential clients. JPMAM has more Citywire rated fund managers and in particular, more AAA rated fund managers than any other fund house having also won Incisive Media’s prestigious Gold Standard for service an unprecedented 4 times running.

Commenting on the reforms, Jasper Berens, Head of UK Sales at JPMorgan Asset Management commented, “Transparency and clarity continue to be major talking points within the financial services industry. We are therefore happy to be heralding these changes now as we are genuinely committed to delivering the very best and fulfilling our clients’ needs in an ever-changing and complex market place, by not only listening to their concerns but by addressing them in a proactive and practical manner.”

* except the Institutional Balanced Fund and Portfolio Fund, both of which are ICVC III offerings