As of yesterday, Courtiers moved from Goldman Sachs in its Money Market Fund (MMF) to Federated Hermes, a Qualifying Money Market Fund (QMMF), which means your statements will now show Federated Hermes, rather than Goldman Sachs, as the holding.
We asked Jacob Reynolds, Asset Management Director, Nigel Breakell, Fund Manager, and Kapil Divecha, Head of Private Clients, more about this change and what it means for clients.
Why is Courtiers no longer using Goldman Sachs?
While Goldman Sachs is still an AAA-rated, highly regarded fund, it lost its QMMF status because of Brexit.
Goldman Sachs is domiciled in Ireland and permitted to be sold in the UK under the ‘Temporary Permissions Regime’. However, with effects of Brexit filtering through, there is a small possibility that Goldman Sachs Manager may decline to register under this regime in future, or that the regime itself may change. This could impact the ability to invest in the fund or change its tax status. Courtiers would not be the only business affected by this change.
The Courtiers Investment Team’s part in helping to protect and support your wealth involves evaluating the funds Courtiers engages and invests with across many factors, including risk and performance. While Goldman Sachs is still highly rated, finding an alternative fund that offers lower fees with a similar potential return, subject to stricter rules on liquidity and domiciled in the UK, made sense.
Why is Courtiers now using Federated Hermes?
When looking across holdings, Federated Hermes stood out to Courtiers as a fund that seemed, at first glance, ‘like for like’ with Goldman Sachs, but on inspection, seems to offer better value.
Federated Hermes:
- Is a QMMF, meaning that it meets stricter regulatory standards under MiFID II and the EU Money Market Fund Regulation (MMFR).
- Is cheaper than Goldman Sachs as the Ongoing Charges Fee is 0.10% pa compared to 0.15%, but you still receive dividends in the same way.
- Offers same day settlement, which allows the transfer of funds between accounts the same day the transaction is authorised, rather than the traditional three to five day working days model.
- Has a longer cut off time of 1:30pm, rather than 1:00pm, meaning Courtiers can action your transaction requests later into the day.
What does it mean for you?
Your wealth is still protected in exactly the same way as it was when it was when Courtiers worked with Goldman Sachs as a provider, and you can still transact and oversee your wealth to the same standard. With a longer cut off time, a cheaper rate and a higher level of regulation standards, Federated Hermes offers better aspects for Courtiers to support your finance future.
From an administrative perspective, the longer cut-off time was a positive, as many other funds Courtiers considered had an earlier cut-off time. This switch primarily affects Courtiers administrative processes, which will reflect in how Courtiers can help you maximise the wealth you created more effectively into the future.
Any questions?
If you need more information, get in contact with your Courtiers Adviser, who can answer your questions or queries either themselves or with support from the Investment Team.
