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13.04.2017 11:02 Age: 98 days
Category: News

Morningstar asks the FCA for stricter rules on disclosure of fund management fees


Answering to the FCA’s (Financial Conduct Authority) review of the UK’s asset management industry, Morningstar (an Investment Research and Management Firm) asked the UK Financial Watchdog to set stricter rules on the disclosure of fund management fees. 

According to Morningstar “a five-year figure of total fund costs would give a more reasonable statement of the funds’ charges”. 

Morningstar also called on the FCA to oblige the fund managers to provide more detailed fee breakdowns. The idea behind this is to allow a close scrutiny of the costs of each service. The full disclosure of those fees would allow investors, the media and research agencies to challenge funds for instance “when revenue is growing disproportionately to performance or when fees remains static in the face of rising assets”.

 Morningstar supports the idea of a single and all-in charge figure which would include: the explicit trading costs (fees paid to banks and brokerage) and the implicit costs. 

The firm is also supporting the idea proposed by the FCA of independent oversight boards for mutual funds. Implemented in the US, this measure provides that every year mutual funds have to write a report for members in which they have to justify the fees they have agreed to pay the fund managers. 

Read the Financial News article here

Read the Financial Times Adviser article here 


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