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Baring set to join trend of higher fund charges

Baring Asset Management has been called greedy after saying it is likely to follow Credit Suisse and Threadneedle in raising management charges.

Baring marketing director Ian Pascal says his firm is looking at raising the charges on some of its funds, arguing that the increase is needed because the costs of running a fund management business have been rising steadily in recent years.

He also blames regulatory pressures and the cost of Ucits 3 conversions for the pressure on costs and expects more fund management firms to follow suit.

Credit Suisse and Threadneedle raised the annual management charges on selected funds last week. Credit Suisse has raised the charge on its income and monthly income funds from 1.2 per cent to 1.5 per cent and Threadneedle has increased the charge on its UK monthly income, UK growth and income and UK equity income funds from 1.25 per cent to 1.5 per cent. The Threadneedle funds have all been in the bottom 15 per cent of their sectors over three years.

Bestinvest business development manager Justin Modray says: “Baring is just following the others in thinking they can make a quick buck by raising the fees. It does not send the right messages to investors. Companies should be trying to raise their confidence but this smacks of greed.”

Pascal says: “It depends on the context. The funds we are considering raising the fees on are charging below the average fees for the sector. If you look at the history of fund char-ges, it is relatively rare for them to raise charges and the funds we are looking at have perhaps not gone up in 10 years. I do not think it is greedy.”


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