Sources inform ''Globes'' that Psagot Investment House Ltd. is raising its management fees on provident funds, especially for small investors. The fee hike, which the company called "selective", applies to all mutual and provident funds, including Gadish, Israel's largest provident fund with NIS 20 billion in assets under management.
Some investors in Psagot's provident and advanced training funds received notification at home in recent days that their management fees will rise steeply beginning in January, from an average of 1.2% to 1.4-1.8%. The fee hikes will be differential: investors with balances of less than NIS 100,000 will pay a management fee of 1.8%. The corresponding management fee at Clal Insurance Enterprises Holdings Ltd. (TASE: CLIS) is 1.5%.
Psagot says that the fee hike is selective, affecting only a few tens of thousands of customers out of the 1.3 million people whose money the investment house manages. The fee hike affects specific populations who meet certain criteria: investors with less than NIS 100,000, and investors who previously enjoyed discounts and sales campaigns that have ended. Management fees for investors who have left their jobs and stopped depositing money into their funds are included in the fee hike. Altogether, about 40,000 customers are affected.
Psagot said, "As part of our routine management, throughout the year we review management fees at Psagot and make adjustments (upwards or downwards). In the case of the expiry of a benefit given for a specified period, a change in management fees is possible. We emphasize that the average management fee at Psagot is less than the industry average. The minimum bracket is well below the industry norm."
The average management fee for provident funds is 1.1%.
Last Sunday, control of Psagot was transferred from York Capital Management LLC to Apax Partners Israel, run by CEO Zehavit Cohen.
Published by Globes [online], Israel business news - www.globes-online.com - on November 4, 2010
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