Franklin Templeton cuts fees to target retail
Franklin Templeton Investments has adjusted the fee structure on its balanced equity offering as it looks to target retail investors.
The fund's management costs have been reduced from a flat fee of 0.77 per cent to 0.39 per cent with a 25 per cent outperformance fee.
The outperformance fee applies when the fund outperforms its index - the S&P/ASX 100 Accumulation Index - after the initial fee has been deducted.
If there is a period of underperformance, this must be clawed back before the outperformance fee will kick in.
The balanced equity fund was launched in October 2011, following the firm's acquisition of Australian equities manager Balanced Equity Management, according to Franklin Templeton director of advisory services Jim McKay.
It has so far received an 'A' rating from van Eyk and a four star rating from Standard & Poor's, he said. "We're also talking to dealer groups at the [approved product list] level," he said.
Franklin Templeton in Australia has around $17 billion in assets in a variety of opportunities, such as institutional fund of funds and other retail investments. Because the fund is new, there are still only limited assets in the fund and, as such, capacity would not be an issue in the near future, McKay said.
"The fund gives advisers more scope to use active Aussie equity funds than they could in the past," he said.
"We think the market overall is compelling from a long-term perspective. We think the market is changing, [Future of Financial Advice reforms are] bringing cost pressures for advisers who are looking for cost-effective and well performing investment alternatives," he said.
Franklin Templeton is also building out its team to support the changes, which include McKay joining in December, with a brief to build out the retail business. They also included the addition of a marketing manager and the appointment of Stuart Devlin as a key account manager to look after the southern region.
The business is also in the final stages of appointing a key account manager for New South Wales to look after the northern region.
"We will look to add more business development staff through the course of this year to build out our sales team," McKay said.
Recommended for you
Clime Investment Management has faced shareholder backlash around “unsatisfactory” financial results and is enacting cost reductions to return the business to profitability by Q1 2025.
Amid a growing appetite for alternatives, investment executives have shared questions advisers should consider when selecting a private markets product compared to their listed counterparts.
Chief executive Maria Lykouras is set to exit JBWere as the bank confirms it is “evolving” its operations for high-net-worth clients.
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
