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IMA issues final guidance for fund charges disclosure

Richard Saunders 450 whitebg

The Investment Management Association’s final guidance for fund charges has called on UK asset managers to go “above and beyond the current European regulatory requirements”.

The trade body has asked fund firms to provide enhanced disclosure of transaction costs by providing three-year average figures for broker commissions and transfer taxes as a percentage of a fund’s net asset value.

The guidance also calls on fund firms to disclose the ongoing charges figures rather than the annual management charge as well as a clearer explanation on the purpose of all charging costs – such as entry and exit, performance and transaction fees.

The new guidance is designed to boost consumer understanding of fund charges and costs and will sit alongside existing regulatory requirements. The IMA has also launched a new online guide to charges and costs.

The IMA, which launched the consultation in June, has asked all members to provide the additional information on their website by March 2013.

Chief executive Richard Saunders (pictured) says: “IMA’s new guidance is intended to benefit all investors and in particular, those who want more detailed information about fund charges and costs. It offers more accessible disclosure of transaction costs, which are explained and disclosed separately because of their difference in nature from fund charges.

“The guidance has been developed with the input of firms managing over 50 per cent of retail funds under management and those firms remain committed to following it.”

The asset management industry has been divided on costs since the launch of a new campaign by former New Star chief investment officer Alan Miller. The True & Fair Campaign launched in February to huge media interest, calling for 100 per cent transparency on where money is invested and the “full underlying cost of investments”.

The campaign, backed by Miller’s wealth management firm, SCM Private, claimed dealing costs, “one of the largest hidden elements”, of £18.5 billion would be paid for the whole of the UK savings and investment industry.


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