Fund managers attacked for hiding charges from investors |
Date: Wednesday, October 14, 2009
Author: Josephine Moulds, Telegraph
Alan Miller, the founding shareholder of New Star Asset Management, has
branded the fund management industry "disgraceful" for hiding charges from
investors.
New Star's former chief investment officer estimates that UK equity
investors could be paying up to £5.8bn a year in charges that are not
included in the Total Expense Ratio of a fund (TER). Despite its name,
the TER does not include costs such as dealing commissions, taxes, and
interest on borrowing.
Mr Miller called for the TER to be replaced with a calculation that includes all charges.
The TER of an average unit trust or open-ended investment company is around 1.6pc. Mr Miller's wealth management company, Spencer-Churchill Miller, said that can rise to as much as 2.8pc a year.