Fulcrum point

3 October 2017 By Neil Unmack Follow @unmack1

The asset manager’s UK offshoot will charge clients more when funds beat their benchmarks and less when they underperform. The risk is that fees become more opaque. Yet a variation on alternative managers’ “2-and-20” model may help it resist the onslaught from cheap trackers.

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Fidelity International said on Oct. 3 it would change the way it charges fees for equity funds.

Using a so-called fulcrum model, the group will charge clients a lower base fee, which will change depending on how a fund performs. The base fee will be lowered if a fund does not beat its benchmark, and raised if it does.

Fidelity did not disclose the new base fee or adjustments.

Fidelity is owned by its staff and the Johnson family, which founded U.S. giant Fidelity Investments. It manages 233 billion pounds ($309 billion) of assets.

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