Octopus is closing its discretionary fund management service, after concluding the offering was not as competitive as other providers in the market.
Shareholders in the company voted at the end of last month (February 23) to merge the Octopus Portfolio Manager funds with the Volare range, managed by LGT Vestra.
In a statement on its website, Octopus said since it launched OPM twelve years ago, there has been a “huge increase” in the number of investment companies launching DFMs.
The group added: “While we are proud of the returns we have delivered for your clients, we do not believe that OPM is as competitive as other funds available on the market.”
LGT Vestra is a UK wealth management firm which manages around £21bn in assets and which is owned by Liechtenstein-based private bank LGT.
The OPM funds will automatically merge with the Volare range on April 14.
Between then and July 28 this year, Octopus will continue to hold the Volare funds in its custody to allow financial advisers to either complete the paperwork to become a customer of LGT Vestra, to transfer their clients’ assets to another provider, or to liquidate them.
If clients would like to transfer their portfolio or liquidate their assets before the merger, Octopus has asked for confirmation no later than March 31.
The ongoing charges figure for the Volare funds is higher than the OPM funds, although Octopus highlights the new funds do not charge a discretionary management fee, and include LGT’s annual management charge of 0.35 per cent.
LGT Vestra also charges a 0.25 per cent custody fee.
Old and new charges
Source: Octopus
Direct holdings with Octopus are in the C shares category, and OPM holdings through third-party platforms are in the B shares.
Octopus charges a headline annual discretionary portfolio management fee of 0.78 per cent, including VAT, for some of its investment profiles.
A spokesperson for the company said: “Octopus will continue to consolidate its position as the UK’s market leader in tax efficient investments, while also developing funds focused on sustainable investments."
sally.hickey@ft.com
