RBS drops Aviva for own private banking arm in high street customer fund management shake-up

Last week’s switch of the management of the funds to Coutts ends Aviva’s 16-year stewardship of most of the funds, having taken over their running in 2003 from previous manager Newton.

The news comes off the back of year that saw Aviva’s investment management arm as the only area of the insurance giant’s business to suffer a fall in profits in 2018, as assets fell by £20 billion to £331 billion.

As well as the loss of management fees from its running of the funds, a number of the insurer’s own funds, in which some of the RBS funds were invested, could now suffer outflows as Coutts’ tenure begins.

The 10-strong fund range was consolidated into six new funds on 20 May.

RBS said the overhaul would “maximise economies of scale and benefit investors by allowing us to offer lower charges for the new funds”.

Ongoing charge figures (OCF) for the new funds have been reduced, though in some cases only marginally, reflecting falls in the annual management charge (AMC), a major component of overall costs.

They remain elevated compared to most other funds, though investors will not also be paying a platform charge.

Among the biggest cuts are to the high ongoing charges for RBS Income and RBS Balanced Growth, which have fallen from 2 per cent to 1.5 per cent and from 1.98 per cent to 1.53 per cent respectively as investors have moved to the new funds.

Others cuts are minimal. Investors who held the RBS High Yield and RBS Extra Income fund, for example, will be paying 1.02 per cent rather than 1.04 per cent.