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How has the Retail Distribution Review (RDR) affected loyalty bonus?

In the past most investors who held funds, such as unit trusts and OEICs, paid a single ongoing charge to the manager of their chosen funds. This charge often included an element of commission which the fund manager shared with brokers, such as Hargreaves Lansdown, to help pay for their service.

We passed some of this commission back to our clients in the form of a loyalty bonus. From the 1 March 2014 we have substantially increased the loyalty bonus on thousands of existing funds. Previously, the average annual loyalty bonus was 0.17% whereas this has now typically risen to 0.75% or more. This means that even if you do nothing you could benefit from savings automatically on 'inclusive' funds you already hold. In many cases the additional loyalty bonus will achieve a similar effect as buying the new 'unbundled' funds.

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