The Effects of the Retail Distribution Review on Fund Fees in the UK

The Retail Distribution Review (RDR) came into effect in January 2013, and one of its key objectives was to stop fund companies from paying commissions to advisers. In our paper, we look at the impact the RDR has had on open-end fund fees against the backdrop of the rise of passive investing, using a sample of funds that encompass the most commonly sought market exposures, from the viewpoint of a UK investor.

In this report, you will learn:
  • Passive equity funds have maintained their competitive edge
  • The downward shift in fees was more muted for fixed-income funds
  • Fee reductions in clean share classes of active funds were significantly lower than those at passive funds

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