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&#39Axing polarisation will increase fund charges&#39

Consumers face an increase in fund management char ges if the polarisation regime is abolished, claims Autif director of communications Anne McMeehan.

Autif is concerned that multi-ties will push up management costs for both big and small fund managers, with the increases passed on to consumers.

McMeehan warns that, under a multi-tied system, specialist fund managers with one or two products to offer would find it increasingly difficult to distribute their funds, forcing them to use the distribution networks of bigger firms. She believes they would have to pay a prem ium for having access.

She says bigger firms would also see costs rise because they face increasing ad costs trying to compete for distribution. As they sign up small fund managers, their costs will rise as they have to accommodate new products in their range.

McMeehan says: “Any shake-up of the regime will result in higher costs to the individual. Specialist fund managers will find their costs rise higher as larger players squeezed their margins. These would in turn be passed on to consumers.

Regency Financial Management partner Bryn Wal ker says: “It is a lose-lose situation which is against everything the Government says it wants.”

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