Garnier calls for IMA to reverse stance on fees

The Treasury Select Committee member, and MP for Wyre Forest, called for the fund management trade body to “stand behind its members” who have called for improved transparency.

HSBC Global Asset Management, Legal & General Investments and BlackRock have now joined Fidelity in calling for a new industry standard of fund fee disclosure which takes into account trading costs.

Mr Garnier said: “I have a lot of respect for the IMA as an organisation, and it is an important lobby group. It is important that it should stand behind its members, and I would hope to be able to push the IMA on the importance of this. It may be complex, but it is absolutely fair to break it down and give an indication of what the full fees are that the investor is paying out.”

Mr Garnier has lent his support to SCM Private founder Alan Miller’s True and Fair campaign, launched last month, which aims to bring all management, dealing and distribution costs onto one document in an effort to improve fee transparency. Fidelity has also proposed a ‘total cost of ownership’ calculation, which shares certain features with SCM Private’s idea.

However, the IMA has so far rejected the need to improve disclosure beyond current practices, citing European research which found that “it would be misleading to investors to show the full costs as it would confuse more than educate”.