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Egg challenges fund managers on charges

Fund managers must be able to demonstrate they provide a superior service if their annual charges are higher than rivals, according to Egg.

The online provider wants fund managers to be more open about annual charges such as total expense ratios and to be able to justify them if they are more costly than other companies.

Egg has launched a range of Isa packages with companies, including HSBC and M&G, which it says have passed the FT fund rating system, which ranks firms according to risk profile, how well funds keep to their objectives and total charges. By only investing in funds which have passed through such a process, Egg says investors are less likely to be stung with high charges for a sub-standard service.

It points to Jupiter and Artemis, which it says tend to have higher than average TERs but show through the service and quality of funds they offer that the cost is warranted.

Egg head of investment products Rob Hudson says: “In our view, it is only a crime if a fund manger charges a high TER and cannot point to a superior service when compared with a lower-cost product.”

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