Legal & General Group Plc Boss Piles On The Pressure Over Pension Fees

Legal & General Group Plc (LON:LGEN) funds continue to benefit from new RDR and auto-enrolment rules.

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The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

The shares of Legal & General (LSE: LGEN) (NASDAQOTH: LGGNY.US) slipped 3% to 211p this morning after the FTSE 100 pensions giant revealed third-quarter results in line with market expectations.

The group’s Total Assets Under Management — the base from which L&G charges its fees — climbed by 2.3% to reach £443bn. Fund inflows from international sources made a significant contribution, with £6.4bn added from divisions in the US, the Gulf, Europe and beyond.

International funds now total £57bn for L&G, having climbed by an impressive £14bn since the start of 2013.

In the UK, the more transparent RDR fund rules and auto-enrolment pensions appear to be working in Legal & General’s favour. Nigel Wilson, L&G chief executive, piled the pressure on competitors by asking the government to lower the cap on auto-enrolment pension fees:

“We have capped auto enrolment charges at 50bps – and we believe nobody saving for a workplace pension in standard default funds should have to pay more than this.  The government’s proposed 75bps cap needs to be strengthened in our opinion: reducing it to 50bps could benefit pension savers by tens of thousands of pounds over a working lifetime”

With a market cap of £12.5bn, L&G’s shares trade at 14 times expected earnings, and offer a prospective dividend yield of 4.6%.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

> Mark owns no securities mentioned in this article.

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