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Rating:Philly Fund Firm Rolls Out R Shares Not Rated 0.0 Email Routing List Email & Route  Print Print
Wednesday, June 18, 2003

Philly Fund Firm Rolls Out R Shares

by: Sean Hanna, Editor in Chief

Another vendor has joined the R share parade. Delaware Investments unveiled its version of the share class for retirement plans today. "Financial advisors who work with us have requested this and we're pleased to be delivering it," explained Rene Campis, executive vice president of Delaware's retirement plan services unit.

The provider will sell the shares to plans with fewer than $10 million in total plan assets. Plans with more than that amount will be offered A shares at NAV instead. Meanwhile, the shares will pay advisors a 50 bps trail that is paid monthly.

"We increased the number of funds on the new platform with even more recognizable fund families. This should make it easier for financial advisors to do business with us," Rene Campis commented. Delaware Investments had been offering a multi-manager platform to plans with more than $1 million in assets. That platform has offered A shares from AIM, Alger, Janus, Lord Abbett, MFS, Pioneer, Putnam, State Street Research and Van Kampen. Plans with fewer than $1 million in assets will be limited to Delaware R shares only.

Delaware's announcement comes on the heels of a research report issued by Bisys' Financial Research Corp. (FRC) to the fund industry that contends that R shares are now a necessity for fund firms seeking to capture retirement plan business through intermediaries. The key market for these shares, according to FRC, is plans with fewer than $10 million in assets. Those plans are not large enough to generate sufficient fees to pay administrators when traditional A shares used in the plan.

The leading provider of R shares is American Funds with American Funds with $5.3 billion of assets. OppenheimerFunds R shares are next most popular with $833 million in assets. Other firms that recently added retirement share classes are T. Rowe Price and Federated Investors. The latter company calls its offering "K" shares.

Merrill Lynch officials have also said that the wirehouse is working on its own version of R shares for later this summer.  

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