Fees, foes, funds
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Talk of fund fees has dominated the industry over the past few weeks: campaigns have been launched, cross words exchanged and battle lines drawn.
An issue that has never really gone away, or addressed definitively for that matter, transparency over charges has divided opinion.
Some have felt it appropriate to come out swinging in defence of the asset management industry, most notably the Investment Management Association.
But it has been a difficult position to defend.
Both Fidelity and Vanguard have been among those to have come out in support for greater transparency.
More recently, City veteran Terry Smith, the chief executive of stockbroking firm Tullet Prebon and founder of Fundsmith, has entered the fray.
Aiming a large broadside at the platforms that have completely changed the way the industry operates over the past decade, Smith called for the abolition of trail commission.
Smith, never one to shy away from controversy, blamed the platforms for keeping fund costs high and suggested that the practice end. (FundTalk continues below)
He proposed instead that platforms charge investors for administration and advice, the suggestion that with the end of trail commission lower fees would become more prevalent.
Smith’s Fundsmith has flown in the face of traditional fund launches and his comments will perhaps emphasise his attitude towards the traditional way of doing business in the fund industry.
His comments have ostracised many in the industry, but it will resonate with his target audience.
And with new ventures being launched regularly to claw back trail commission, such as Ivan Massow’s latest venture, advisers are likely to face increasing challenges.
However, after all the hot air generated by the fees debates dissipates one thing remains: the end investor.
Just as the retail distribution review (RDR) has forced investment advisers to become introspective, so too will the investor.
Investors will have to take tough decisions too and work out where their priorities are.
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