TCF Investment chief executive David Norman, an avid campaigner on transparency in fund management charges, has been forced to defend the charges on its tracker funds which are quoted at up to 3.79 per cent.
There are four tracker funds in the Total Clarity Fund range, which launched in October 2010 and have combined assets under management of £10m.
Fund factsheets quote ongoing charges of 3.79 per cent for the Total Clarity Defensive fund, ongoing charges of 2.87 per cent the Total Clarity Diversified fund, ongoing charges of 2.63 per cent for the Total Clarity Cautious Growth fund and ongoing charges of 1.86 per cent for the Total Clarity Diversified Balanced fund.
TCF Investment chief executive David Norman says the total expense ratio is actually 0.8 per cent but that the fund information reflects historical charges due to a change of authorised corporate director and associated administration costs.
Norman says: “We have to work within a regulatory framework that requires us to show historic total expense ratios which may be out of date. In terms of treating customers fairly, this is probably slightly misleading but there has been no sleight of hand.”
Verbatim Asset Management bought the rights to the funds in June.
IFA Three Counties head of investments and product strategy Andrew Alexander says: “If this was active management, all hell would be breaking loose. For them to bang on about clarity is a disgrace.”
Chase de Vere head of communications Patrick Connolly says: “0.8 per cent is still high for a passive. You should be looking at a maximum of 0.5 per cent but more realistically closer to 0.2 or 0.3 per cent.”