America's second largest mutual funds manager Vanguard is set to shake up the managed funds business in Australia with the launch of six no-load funds.
America's second largest mutual funds manager Vanguard is set to shake up the managed funds business in Australia.
It has, through subsidiary Vanguard Investments Australia, started offering no-load, low-cost indexed funds to retail investors.
The move is significant for two reasons. It is the first time a major manager has attempted to sell retail unit trusts without paying intermediaries; secondly it is another symbol of the increasing globalisation of the financial services industry.
Such a move has implications for the financial planning community that relies on upfront fees and commissions for part of their income.
If Vanguard's direct selling is successful it may push advisers towards charging on a fee for service basis.
The closest New Zealand has to no-load managed funds are the likes of those offered by ANZ Funds Management. Currently it only sells its funds through an in-house, salaried adviser and doesn't charge an entry fee.
In the United States Vanguard has more than 8 million individual and institutional investors, and it has $A530 billion under management.
It has launched six retail funds in Australia covering local shares, international shares, property securities and three Life-Strategy funds offering conservative, growth and high-growth asset mixes. All of these will use an indexed approach.
America's second largest mutual funds manager Vanguard is set to shake up the managed funds business in Australia.