Autif is reassuring IFAs that fund management charges are fair and transparent following an article in The Sunday Times accusing the industry of “cheating” investors.
The trade association has gone public with correspondence between itself and the newspaper to underline its case. It is refuting claims that fund managers are taking billions of pounds in hidden fees each year and that half of all investment growth is lost to charges.
It says undeclared charges are accounted for by stamp duty, auditors, registrars and trustees fees. They average 0.5 to 0.7 per cent of the fund and do not go into fund managers' pockets. It says the charges are taken directly from the fund, have a negligible effect on the consumer and are strictly regulated.
But the Press Complaints Commission has rejected a complaint made by Autif on the grounds the article is backed with a quote from the FSA that there have been no further complaints and that Autif as a trade body was not directly affected. Autif has now asked it to reconsider and argues it was representing its members.
It says a senior FSA official has stated that its quotes were taken out of context “to suit the storyline”.
In its original letter to the PCC, dated November 6, Autif complains the article, which appeared on October 1, was misleading, inaccurate and distorted.
It accuses the newspaper of failing to understand the regulation and operation of the fund industry.
Autif says it is continuing to fight for better disclosure in the industry but that current regulations already prevent the type of practices alleged.
Director general Philip Warland says: “The people who were most worried about this article were the IFAs, whose clients were coming in and asking what are all these hidden charges.”
The Sunday Times was unavailable to comment.