Baillie Gifford to shut down its investment trust savings schemes

Baillie Gifford has joined the growing number of investment trust managers moving to offer a new home for holdings invested directly with them. We explain why.

Funds and Investment Trusts April 23, 2019 by Tom Bailey

Baillie Gifford has announced that it will be shutting down its investment trust savings schemes, including its Isa, Share Plan and Children’s Savings Plan representing £1.3bn in assets under management.

At present, Baillie Gifford has over 21,000 retail investors within its various savings schemes. These investors will be transferred to Hargreaves Lansdown, which has agreed to keep Baillie Gifford’s current charging scheme for three years after the transition date.

Savers currently in a Baillie Gifford scheme will be contacted by the asset manager before the transfer with further details of their options. Investors will have the option to transfer at various points over the next few months with the final date being at the end of August.

Existing Isa, Share Plan and Children’s Savings Plan investors will also be able to add to their respective plans. The schemes are now closed to new investors.

Baillie Gifford’s decision to transfer their customers’ savings plans to Hargreaves is part of a growing trend of asset managers and investment houses choosing to stop servicing customers directly.

In January, Witan announced it would be moving 16,000 retail investors in savings schemes to Hargreaves Lansdown. Similarly, in 2015 Jupiter moved around 5,000 of its investment trust clients to the online platform.

Driving this trend is an acceptance that investment platforms are able to offer a better service and customer experience than investment houses or asset managers. This, James Budden, director of retail marketing and distribution at Baillie Gifford, notes, was a key consideration behind Baillie Gifford ending its savings services.

He says: “The increasing variety, capability and cost effectiveness of investment platforms in the wider savings market has led us to decide plan holders of our investment trust savings scheme are best served by a specialist platform.”

Similar justification was offered by Witan when it announced its decision in January. Harry Henderson, the chairman of Witan Investment Trust noted at the time: “There is an increasing range of savings platforms offering a broader array of services than those available to Witan savings scheme investors.”

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