Investors are driving a new transparency in fund management which should see costs coming down and poor-value funds disappearing.
That is the industry view ahead of the ban from next January on advisers receiving commissions, which is intended by the regulator to improve professionalism and clean up investment advice.
Two fund boutiques, TCF Investment and SCM Private, have been campaigning for fuller disclosure of fund management charges, claiming that hidden transaction and other expenses add significantly to the real costs of many actively-managed funds. The Investment Management Association, however, insists that such add-ons are immaterial or related to performance, and that the total expense ratio (Ter) formula is a true indicator of costs.
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