Gina Miller: We need a law for transparency on fees
Savers and pensioners demand statutory regulation to force disclosure of all fund fees and costs
Savers want full disclosure of ALL investment fees and charges
More than 90 per cent of investors believe legislation is necessary to force transparency
True and Fair Campaign calls on regulators to guarantee investor confidence
An overwhelming majority of Britain’s savers and investors want full disclosure of the investment fees and charges levied by investment companies with more than 90 per cent (92%) saying that firms should be legally obliged to provide this information, according to a new report from The True and Fair Campaign.¹
The report marks one year since the launch of The True and Fair Campaign, which continues to call for a fair and transparent deal for consumers, and demonstrates just how important the issues of transparency and fee disclosure are.
Almost three quarters (74%), of investors questioned said they wanted costs and fees disclosed as a single, cash figure - something The True and Fair Campaign has been urging as a bench-mark to enable simple comparisons between financial savings and investment products.
The findings also highlight the value savers place on understanding what they are paying for. More than 80 per cent (84%) of those polled said that it is very important they understand the fees they pay for investment or pension products, and yet more than half (58%) said they did not know the cost of their current products, including fees.
Gina Miller, founder of The True and Fair Campaign said: “This latest research shows how much savers and investors care about the money they’re being charged by their investment providers. A year ago, just after we launched The True and Fair Campaign, the former head of the industry trade body, the Investment Management Association (‘IMA’), Richard Saunders described the industry’s hidden charges as “a myth.”
"One year on the results of this survey prove that savers do not agree with this analysis and feel that statutory disclosure of costs and fees is the only solution to end the scandal of hidden charges.
“It is completely indefensible that two thirds of people buying investment products do not know how much they are paying in fees and charges. But what is worse is the fact that while we call for transparency and 100 per cent disclosure, the industry continues to hide under a thin rhetorical veil promising more disclosure, not full disclosure, and wraps itself in opaque, ill-defined guidelines.”
The survey also revealed that just 42 per cent of investors know approximately how much they pay in fees and charges. Those who are aware of fees and charges think they are paying about 1.58 per cent for their investments, compared to the 0.3 per cent that the IMA claimed investors paid in its 10th Annual Management Survey, released last year. However, based on analysis by the True and Fair Campaign, once all the extra hidden costs, fees and charges are added in people are often paying closer to 3 per cent.
Gina Miller continues: “It is time for the industry to come clean before consumers vote with their wallets and opt to avoid hidden charges by investing their money elsewhere. We continue to call on the industry regulators to sign up to our six point plan² to ensure the protection of consumers and begin to regain their trust.”
¹ An online survey was conducted on behalf of SCM Private by Research Plus among 2,021 UK adults from 4-10 January 2013.
² The True and Fair Campaign launched a six point plan for regulators in November 2012. The plan called on the Financial Conduct Authority (‘FCA’) to urgently address six core tasks to ensure that the forthcoming Retail Distribution Review (‘RDR’) does not fail in its stated intention to promote better consumer protection and restore trust in financial services.
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