Administration fees for master trusts are expected to stay at about 0.75 per cent, says Norwich Union Navigator head of business development Stephen Trist.
Administration fees for master trusts are expected to stay at about 0.75 per cent, says Norwich Union Navigator head of business development Stephen Trist.
“New entrants are not cost-cutting and that is leading to administration fees staying at 0.75 per cent, but this could come down to 0.6 per cent in the next couple of years,” he says.
“This is because there will be too many administration service providers by then.”
However, fund managers are being squeezed on wholesale management fees under the master trust arrangement with charges coming down from 1 per cent to 0.6 per cent. Trist expects this to fall further to 0.5 per cent.
He cites the growth of Navigator as evidence of how administration funds have taken off in recent years. Navigator took seven years to raise its first $1 bil-lion, he says. It then took three years to get $5 billion of funds under admini-stration.
“Every fund manager is trying to get into the administration business and this will lead to more outsourcing by financial planners,” Trist says
“This is good for financial planners as they are not administrators and can sub-sequently focus on growth of their business.”
