PETALING JAYA: The single-pricing regime (SPR) for unit trusts will in the long run pressure fund houses to reduce sales charges and see unit trust consultants playing a more active and advisory role in their clients' future investments.
CIMB-Principal Asset Management Bhd chief executive Noripah Kamso said that in the long run, the SPR was good for the industry because it would be the beginning of a more transparent and cheaper cost of investing.
“Clients will be clearly informed about the different distribution channel charges. This will pressure fund houses to reduce distributors' sales charges.
“This move is in line with (the trend in) developed countries. Sales charges in the United States tend to range between 4% and5%, slightly below our industry here as a whole,'' Noripah told StarBiz.
The Federation of Malaysian Unit Trust Managers president Tunku Datuk Ya’acob Tunku Abdullah said since discounts and rebates would no longer be allowed under the SPR, the industry could come under pressure to lower fees in the long term.
“There will be a paradigm shift as unit trust consultants will move from being sales oriented to a portfolio-managed mentality. The emphasis will be to retain investors and actively manage their funds by switching in and out of the different asset classes to optimise returns for investors.
“The role of the unit trust consultants of the future will be more like that of a fund manager rather than that of a salesman,” Tunku Ya'acob added.
He said the federation applauded the Securities Commission's (SC) move to implement the SPR as it would result in better transparency compared with the current two-price system.
He said the two-price system of bid and offer pricing would be replaced by a fund's net asset value.
Tunku Ya'acob said the upfront fees would be calculated based on the investment amount, similar to the practice in the stockbroking industry.
Pacific Mutual Fund Bhd general manager for business development and marketing Gary Gan said the regime would benefit the industry in terms of transparency in fund sales charges.
He hopes the regulators would also take into account the numerous proposals and recommendations from industry players so as to develop the most optimum SPR structure.
SC chairman Datuk Zarinah Anwar said recently that the implementation of SPR for unit trusts had been deferred to July 1 from the original schedule of April 1.
She said that under the regime, the SC expected full disclosure of the different sales charges between different distribution channels in the prospectus or statements.