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State Street loses £600m mandate as LV= selects Vanguard

State Street loses £600m mandate as LV= selects Vanguard

LV= has chosen Vanguard for a 10-fund partnership with State Street losing out on the £600 million mandate.

Previously State Street was running this mandate for LV=, however earlier this week the mutual insurer announced it had moved to Vanguard as its new fund partner. 

This decision means £600 million of assets are being switched from State Street to Vanguard following ‘an extensive tender process’, the company said.

For this new mandate Vanguard is going to be using eight existing Vanguard funds with the passive giant creating two, Balanced Index and Global Equity Tracker, specifically for LV=. The funds will still carry the LV= label.

According to LV= the switch to Vanguard will cut the overall average fund charges by 44 basis points (bps) for the index funds with the Balanced Index fund seeing a total  fund charge of 9 bps.

John Perks, LV=’s managing director of life pensions, said while State Street was providing good funds for the mandate Vanguard is offering a more ‘competitively priced’ offer.

‘Going forward we believe that it gives us a very strong proposition for existing clients but also for new business.’

Steve Lewis, LV=’s life sales and marketing director, said: ‘Vanguard has a clear ethos to be simple, low cost and transparent and, as a company created on mutual values, there are real synergies between the companies. We believe that, through this partnership, we can ensure both new and existing LV= customers get a high quality product and good value for money.

‘This change to of Balanced Index fund in particular gives us a default fund in which I am genuinely proud to offer to our advisers and their clients.’

State Street has been approached for comment.

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