IMA to open consultation on cost transparency

The chief executive of the Investment Management Association said the ongoing debate into cost transparency was “corrosive”, amid claims from critics last year that fund managers were obscuring costs.

He said: “The notion that fund managers hide costs is one of the most corrosive issues we face.

“We are working on proposals for a simple, comprehensive statement of return and costs to be included in reports and accounts, which would incorporate all the costs incurred by a fund over the course of a year and provide full accountability to investors in a simple pounds and pence figure.”

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Mr Godfrey said the IMA was busy “working our way through the responses” to its consultation, to make sure it “took on board all the sensible suggestions”.

The IMA is expected to provide a feedback statement and start getting on with the next stages over the coming months.

His comments came after strong criticism from the True and Fair Campaign on costs in the fund management industry, which last year had claimed the IMA had done little to combat the prevalence of hidden fees.

Adviser View

Ashley Clark, managing director of Staffordshire-based, said: “I have no problem with any firm charging, but transparency is key. I get a lot of new clients who have no clue what the annual management charge is on their investment or whether there is a trail fee involved.”