Fidelity introduces performance related variable fee on equity funds

Fidelity said that it is in response to the growing debate around the value of active fund management, the industry's alignment with client interests and the transparency of charging structures. Fidelity International believes that now is the time to make a fundamental change in how it charges for its services.

Today, Fidelity International is leading the market by introducing a new variable management fee model across its active equity capabilities for its clients, globally. This will involve both a reduction of the annual management fee and a change to a variable management fee that is symmetrically linked to fund performance.

This variable management fee operates as a sliding scale and acts as a two-way sharing of risk and return - also known as a 'fulcrum fee'. Where they deliver outperformance net of fees they will share in the upside and in the case that clients experience only benchmark level performance or below, they will see lower fee levels under this new model. The fee that clients will pay will sit within a range and will be subject to a pre-determined cap (maximum) and floor (minimum).

This will therefore affect many of our clients who hold Fidelity funds and we will bring you more news on this as soon as we can.

Please note that this does not affect funds from other investment providers that are held on Fidelity's platform, Fundsnetwork.

Uploaded - 4 October 2017

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