Investment Management Association chief executive Richard Saunders has stepped up the trade body’s attacks on fee structures in the City.
In his blog, Saunders says sell-side City firms like banks and brokers that sell on assets to investors cream off a “melange of revenue streams”. He says while some of these fees are visible to end investors others are not.
He says: “It is a pretty lucrative business. But at the end of the day, this is all at the expense of the pension funds and other savings of ordinary people which provide the funds which support the capital markets.”
Saunders says the buy-side of the industry, namely IMA member firms which trade assets on behalf of investors, is different in that fees are transparent and it seeks “to invest clients’ money as efficiently as possible”.
The remarks come after IMA chairman Douglas Ferrans in December published an offical report for the Institutional Investors Council which slammed City firms for a fees ‘rip-off’ when managing rights issues.