View more on these topics

&#39Open up fund TERs to show true costs&#39

Fund research company Fitzrovia is calling for total expense ratios to be used as an indication of true fund costs across the industry as fund firms continue to increase annual charges on Oeics and unit trusts.

Fitzrovia wants investment houses to be more open about their total expense ratios after its research found that annual charges have on average risen in recent years as increasing numbers of product providers have launched funds on to the market.

Between 1997 and 2001, Fitzrovia found that the mean average TER of actively managed funds increased to 1.57 per cent from 1.53 per cent while annual management charges rose to 1.37 per cent from 1.34 per cent.

In purely mainstream investment areas, such as the UK, US, Europe and Japan, average TERs increased to 1.53 per cent in 2001 from 1.5 per cent in 1997 while average AMCs rose to 1.36 per cent from 1.32 per cent over the same period.

Fitzrovia says it is essential for IFAs and fund managers to be aware of TERs, which consist of all operating costs including admin, custody and audit expenses, because of the impact they have on fund performance.

It says fund managers should adjust their performance targets to take into account these charges.

Associate director (communications) Ed Moisson says: “As far as Fitzrovia is concerned, we continue to encourage companies to show their total expense ratios because they are better at demonstrating annual charges to IFAsand fund managers.”

Chase de Vere savings and investment manager Anna Bowes says: “We would welcome anything that makes clear to investors exactly what the charges are.

“But investors need to know what the AMC is separately and understand that higher charges can mean better performance.”

Recommended

Legal & General slashes IFA pension commission

Legal & General has stunned IFAs by slashing commission across its pension range, with advisers claiming that they can no longer effectively sell the products.IFAs have reacted angrily to the cuts, claiming the move shows that L&G is only interested in distributing through link-ups with Barclays Bank and Alliance & Leicester.L&G claims that the new […]

Clients to stay with IFAs after multi-ties

Almost two-thirds of UK investors seeking advice would switch to an IFA if their existing adviser were to multi-tie, according to research commissioned by Fidelity.Sixty per cent of the 426 investors questioned by Mori last month said they would move to a new IFA if their adviser multi-tied. More than half pledged to switch to […]

Guidelines for trustees

An independent set of guidelines to help new and existing pension trustees has been published ahead of the Myners&#39 review recommending new responsibilities.An independent group of trustees has collaborated to produce a code of practice that will help trustees assess whether they are undertaking their responsibilities correctly.Launching the guide in London last week, pensions minister […]

IFAs must act to ward off snooping

The so-called “war on terrorism” is in danger of becoming an authoritarians&#39 charter, restricting our liberties as the Government authorises snooping on all our communications data.If this move is allowed through Parliament it will soon be possible, without the need for a court order, for phone calls, internet transactions, emails and the post to be […]

Europe 2017: Value, large-caps & liquidity

Joshua Ausden, Head of Client Investment Strategy, Neptune Read more here Important Information – for Investment Professionals Only. Not for Retail Clients.Investment risksNeptune funds may have a high volatility rating and past performance and forecasts are not a guide to future performance. These are Neptune’s views and as such this document is deemed to be […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment