I live in the UK, and over the years have put savings into funds with several different institutions with a view to diversification to reduce risk. Two of these institutions are Legal & General and Fidelity. During 2021 I received notice that funds managed by Legal & General would be transferred to Fidelity, and this change has now been effected (eg to view the value of my holding of a Legal & General fund I must log in to Fidelity's website).
I think I broadly understand the arrangement. In outline:
Legal & General still manage their funds (see here), meaning that they make the decisions on which companies etc a fund will invest in and what proportion of the fund in each.
Fidelity handle the interface with investors including purchases and sales of the fund and provision of periodic statements.
Question: For an investor who holds a fund managed by Legal & General and a fund managed by Fidelity, does this arrangement between these two institutions imply a reduction in diversification and consequent increase in risk?