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Your support makes all the difference.Are they going up?
Hopefully they’ll become clearer, which could lead to investment charges going down.
That sounds good news. But how?
The debate about confusing and unfair charges was reignited this week by a report from the Financial Services Consumer Panel, which advises the City watchdog. In a damning report, the FSCP asked for investment managers to be required to quote a single and comprehensive annual charge. The panel said: “It is unacceptable that consumers do not know what firms are charging them to manage money on their behalf, and cannot compare different offers.”
Is it that difficult to compare charges?
It’s almost impossible. The report concluded that widespread and persistent problems of cost opacity and cost control suggest underlying structural deficiencies. It called for what it termed a “radical” solution – the single investment management charge, which would include estimates of forward costs such as transaction charges. All other costs, at present deducted by the investment manager directly from the fund, would be reflected in the charge.
How has the investment industry reacted?
The Investment Management Association said it has developed a measure that tells consumers, in pounds and pence, by how much a unit in a fund grew and how much it cost to achieve that growth. But the IMA’s chief executive, Daniel Godfrey, admitted: “There is more to do.”
Is there?
There certainly is. The Chelsea Financial Services chief Darius McDermott said: “In a world of greater transparency, there must be a simple charge.” He’s right. So the FSCP has called on the Financial Conduct Authority and the Department for Work and Pensions to investigate the issue further.
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