European Parliament economic and monetary affairs committee chair Sharon Bowles is calling on pension providers that charge “exorbitant fees” to give money back to investors.
Bowles, LibDem MEP for the South-east, says provider fees are particularly high in the UK compared with other parts of Europe. She says: “Morally, it would be right to get money back to the investors. The problem is that asset management costs eat up substantially more of a fund’s growth than is received by the investor.”
Bowles has passed information about the proportion of funds going towards charges to the Government and to the European Commission and hopes they will act on it.
She is considering recommending changes to the EC’s packaged retail investment products regime.
Bowles says a lack of transparency around fees outside the top-line management charges means it is difficult for people to know the true cost of their investment.
Access Wealth Management financial planner Jim Clancy says: “Regulators have to strike a balance between allowing providers to make a profit for shareholders while making the charges fair and clear so consumers can decide where to invest.”