Legge says greater action needs to be taken by the trade body to ensure adherence to the sector’s rules.
He says: “If rules are set for sectors, then surely they need to be enforced.
“How effective can a rule be if it uses the word aim? We could all say we are terribly sorry but we were aiming to keep within the 70mph speed limit on the M1, m’lord.”
In order to qualify for the UK equity income sector, the second-biggest sector with £46.36bn in funds under management, a portfolio must have 80 per cent invested in UK equities and the fund must aim to distribute a yield of 110 per cent of the FTSE All Share.
However, according to figures from www.fundfact.com and Trustnet, under half of the 87 funds in the sector were reaching the 4.64 per cent yield target on August 7.
Legge says some positive steps have already been taken by the IMA but more can be done, such as the removal of the word aim to dispel any ambiguity.
Legge says a sector split of those who do not provide the yield is a potential solution.
He says: “This would enable advisers and their clients to make like-for-like comparisons and for funds to meet the exact needs of the different investors in the sector.
“The IMA has revised the UK corporate bond and UK other bond sectors into three components. What could be wrong, therefore, in splitting the UK equity income sector into two?”
The IMA says it has no plans to add to its recent revamp of the UK equity income sector. Those that fail to meet its parameters by January 2009 will have to leave the sector.