Scottish fund managers are "deceiving" their customers through a minefield of hidden charges, misleading advertising and obfuscation over performance, according to the founders of new campaign aimed at ensuring investors get a fairer deal.
Alan and Gina Miller – a husband-and-wife team who held senior roles in the City before launching the True and Fair Campaign in January – also blame third parties such as IFAs for syphoning out investors' funds and giving savings and investments a bad name.
"The very people who deserve to be told the truth about charges, and who need the greatest encouragement to build up adequate savings, are being deceived," said Gina Miller, who formerly advised fund-management firms on their marketing.
Alan Miller, who was chief investment officer at New Star Asset Management, having previously held senior roles at fund managers Gartmore and Hermes, said: "One could argue much of what is done by fund-management firms is legalised fraud and the regulator in the UK has done nothing to change that."
The Millers are calling on Westminster and the EU, plus the Financial Services Authority, to force the fund-management industry – which has assets under management of £4.2 trillion in the UK – to become more transparent. They want to see a single figure to be divulged by every fund, and said they are putting this into practice at their own London-based firm SCM Private.
Alan Miller said the FSA's Retail Distribution Review – due to shake up the way investment products are distributed and sold from January 2013 – is only going to make matters worse.
"The new prices that asset-management firms will quote from January 1 will not include important additional fees," he said.
Charlie Parker, investment editor at CityWire, said: "There's probably no-one in Britain who has a clearer view of the excesses of marketing-fuelled asset management than Alan Miller."
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