View more on these topics

Hargreaves challenges AITC to justify performance fees

Hargreaves Lansdown chairman Peter Hargreaves is challenging the AITC to prove the results of its recent survey on performance fees.

Hargreaves hit out at the AITC after its survey showed that most investment trust shareholders were keen on paying performance fees.

He has called on the AITC to show him the questionnaire because he thinks only fund companies benefit from performance-related charging structures.

But the AITC defends the poll and has offered to hand over the results of the survey, which was carried out among 1,468 investors as part of a wider confidence survey.

The AITC believes that in some cases performance fees align fund manager interests with those of the shareholder but also claims that it keeps an open mind on fees.

Hargreaves says performance fees are open to abuse and do not benefit anyone other than the fund group.

In an article in Money Marketing, Hargreaves says: “I have never seen a performance fee that benefits any other than the fund management group. Of course, if you ask loaded questions, you might get the answer you are seeking but if investors are shown the facts and informed accurately of what performance fees mean, they will unanimously vote no.”

AITC communications director Annabel Brodie-Smith says: “We have an open mind on these things. Why would we fix the results of our own poll? The results show that there are a number of people who would find performance fees attractive since they feel it aligns the fund manager’s interests more in line with theirs.”Hargreaves, p32

Recommended

Called to the bar

Vantis Corporate Finance has established Cross Oak Inns, an enterprise investment scheme which aims for capital growth by investing in a portfolio of pub restaurants in Southern England. Vantis hopes to raise £3m through this share issue and with gearing of up to 70 per cent, the amount should be enough to buy between five […]

Leeds & Holbeck new BTL mortgage

Leeds & Holbeck Building Society is launching a five year buy to let mortgage aimed specifically at existing landlords wishing to remortgage existing properties in their portfolio.The loan tracks Bank of England base rate plus 1 per cent, making the current rate 5.75 per cent. It comes with a free valuation and free use of […]

All-round winners

Catherine Boyle looks at the final four for the IFA Woman of the Year 2004 award.

Guide

Guide: what you need to consider for your auto-enrolment project

In this guide, Johnson Fleming reveals what items you need to understand to gauge the impact of auto-enrolment on your business. The guide focuses on: the impact that your auto-enrolment scheme will have on you; assessing your workforce; understanding your staging date; reviewing your current provision; and modelling contribution levels and costs.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment