Fairstone has converted four of its MPS portfolios into funds in a move that it claims will cut client charges by up to 20%.
The portfolios converted into funds are the four in the Fairstone Systematic Powered by Dimensional MPS range of globally diversified low-cost portfolios.
The four portfolios which have been unitised held risk ratings of 4 to 7. The remaining two portfolios, with combined assets of £10m, will see their discretionary fund management fees fall from 0.15% to 0.07%.
The portfolios have been converted into the new IFSL Fairstone Systematic funds, with combined assets under management of around £600m.
The assets have been transferred into the four new multi-asset funds.
Fairstone said it expects the ongoing charges figure (OCF) for the portfolios to be cut by around 20% from between 0.42% and 0.43% to a target of between 0.33% and 0.34% for the new funds.
The wealth manager has appointed the Marlborough Group’s Investment Fund Services (IFSL) as the funds’ authorised corporate director to help launch the funds. Now they have been launched, IFSL will provide oversight to protect the best interests of investors and has ultimate regulatory responsibility.
Fairstone has also appointed Dimensional Fund Advisers as the sub-investment manager for the funds, with responsibility for day-to-day investment decisions.
Nick Stebbing, chief product and proposition officer at Fairstone, said: “By leveraging the operational flexibility of the fund structure and our buying power, we can deliver lower overall costs to clients right across the board with no compromise to philosophy or implementation.
“This is another strong step forward for the Fairstone Systematic proposition – improving value, efficiency and client outcomes.”
The IFSL Fairstone Systematic 4 and IFSL Fairstone Systematic 5 funds are in the Investment Association’s Mixed Investment 20-60% Shares sector. The IFSL Fairstone Systematic 6 and IFSL Fairstone Systematic 7 funds are in the IA Mixed Investment 40-85% Shares sector.
Fairstone manages over £21bn of client assets and has plans to grow in size to £40bn of client assets under management by the end of 2030. It operates from more than 50 different locations, employs 1,250 people and serves 60,000 wealth clients.