Alan Miller gains big-name support for fund fees campaign

The former New Star chief investment officer today launched a “True and Fair” campaign for transparency in fund fees, calling for more disclosure from fund managers.

Speaking at the launch, Mr Miller said: “Our aim is to provide clients with a breakdown, in a consistent layout, of all the fees incurred during the investment of their money. It will give one total, an all-inclusive number so that they can compare one product to another.”

Also supporting Mr Miller was Mark Garnier MP, a member of the Treasury Select Committee (TSC), and John McFall, who chaired the TSC for 10 years. Lipper’s Ed Moisson and Tim Jones, chief executive of the National Employment Savings Trust (Nest) also attended the launch in support of Mr Miller.

His proposed fee breakdown would provide details of all costs on top of the annual management charge, including custody costs, administration charges, performance fees and dealing costs, as well as any platform, advice and entry or exit charges incurred. This would result in one headline figure for each investment product. The final format is proposed to be decided by an independent body.

The proposals come a day after Fidelity published its own calls for a transparent fee structure detailing all costs incurred in a fund.

As well as charging transparency, Mr Miller also called for UK fund managers to reflect the disclosure patterns of US fund houses and publish full portfolios “at least quarterly”. Currently there is no requirement for fund managers to publish their portfolios in full, and some factsheets do not include top 10 stock positions.

The True and Fair campaign is set to challenge providers of all types of investment products to comply with the model or risk being labelled as unfair to investors.

Mr Miller also hit out at the Investment Management Association (IMA), which he said should be “nowhere near” fund labelling or disclosure guidance.

“The FSA has wrongly delegated these powers to the IMA which acts in the interests of its members and not consumers,” he said. “There needs to be an independent body with responsibility for this that people actually trust.”

The IMA last week dismissed the campaign with the publication of research that it claimed proved that dealing costs did not have a material impact on fund returns. The fund management trade body denied that any charges were hidden, saying that all fees were detailed in fund documents, but Mr Miller has called for these fees to be disclosed in one standard form.

Gina Miller, head of sales and marketing at SCM Private, added that the campaign would concentrate on getting the backing of consumers and regulators in order to force the hand of the “cartel” of fund managers which she said were reluctant to change their disclosure methods.