Matt Gibson, partner and head of investment research at LCP and author of the report, said it was “important” for users of investment management such as pension schemes to “put negotiating pressure on them to reduce fees”.
“Whilst we welcome the reduction in fee rates in many asset classes, overall, investment managers are charging much more but don’t seem to be doing more.”
The typical ‘ad velorem’ fee structure employed by investment managers, where investors pay a fee equal to a percentage of their assets, means that as investment strategies grow they become more profitable to operate.
The FCA is currently investigating the industry’s fee structures through its Market Study of Asset Management, which will assess whether economies of scale are passed back to investors when funds grow in size.
