Advance joins with Mellon in retail expansion
Advance Asset Managementhas signed an exclusive deal with the US-basedMellon Global Investmentsto offer the latter’s products to the market.
The deal represents a sizeable retail expansion for both groups, with Advance products jumping from 12 to 20 retail investment products.
The move also includes MacarthurCook signing with Advance, additional underlying managers being added and a reduction in the overall average fees to 1.89 per cent.
Advance managing director Kate Mulligan says the moves are an upgrade of its retail and wholesale products, which will now have 10 single manager funds and 10 multi-blend funds, seven of them new, split between single and multi-sectors.
The deal for Mellon is its first move into retail in Australia, according to Mellon managing director James Gruver, after operating on the wholesale side of the market for more than two years during which time it has accumulated $5 billion in funds under administration. Globally the group has $911 billion in funds under management and operates in the US, UK and Asia.
Mellon is the parent group of 12 underlying managers and Advance has signed mandates with four of them accessing unhedged active global equities, fully hedged indexed global equities, active global diversified bonds and active thematic global diversified bonds.
The 20 products will cover all asset classes and be offered as the Advance Alliance Investment Suite, with all products outsourced. Cash, fixed interest and property securities have been the last asset classes to shift out from under Advance, while MacarthurCook will offer mortgage fund products.
Mulligan says Advance decided to upgrade and expand its retail offering as its research indicated 30 per cent of advisers still used retail managed funds, and as such, had reduced its overall average fee across all funds and increased trail commissions from 44 to 55 basis points.
A month ago, Advance, which will pass $4 billion in funds under management next month, signed a deal withMaple-Brown Abbottto roll out an Asian equities fund that is due to open from mid-May.
AUTHOR
Jason Spits
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