Bringing you live news and features since 2006 

Beverly Chandler

True and Fair comments on LGIM unbundling

RELATED TOPICS​

Gina Miller, Founder of SCM Direct & The True and Fair Campaign has commented on Legal & General Investment Management (LGIM)’s recent action in unbundling the price it pays for research in a bid to increase fee transparency across is active fund range. 

Miller writes: “We have been saying for years that it is a total scandal that UK retail investors were secretly paying twice for fund managers to do the same job, researching the best stocks, firstly through the annual management fee and then secretly through inflated commissions to brokers who would then offer ‘free’ research back to managers to help them select the stocks.
 
 “Of course the industry has met this criticism by either trying to deny its size or saying that any rules to bring full fee transparency into the industry, would have ‘unintended consequences’, which we can only presume would be a reduction in high profit margins in the City.  
 
“L&G has broken ranks, ahead of MiFID II which will require asset managers to be explicit about all costs, by charging clients directly for the research costs rather than indirectly via inflated dealing commissions. From their numbers, investors can now see the real extent by which the UK industry were artificially keeping their own costs down by charging clients higher dealing commissions to receive research.  
 
“Judging from the new charges and the new transparent breakdown shown by L&G, it would seem that the UK investment industry was secretly charging approximately an extra 14 per cent of the previously stated fees, in hidden research related costs.  We have based this calculation on the extra charge as a proportion of the previously stated LGIM Fund Management Fee.
 
“We applaud LGIM for not waiting until the EU forces this change on the UK industry around 2018, but acting now.  It is a great shame that the rest of the UK industry and its anti-consumer trade body, the Investment Association, are not following their lead.
 
“Dan Attwood of LGIM says: ‘It’s not necessarily what the regulator is doing, it’s about doing what’s best for customers and what we can do to improve transparency,' – hooray someone gets it!” Miller writes. “When will the other UK Investment dinosaurs wake up and grant investors their basic consumer rights of knowing exactly how much they are paying.”

Latest News

REX Shares has announced a strategic reorganisation that integrates its REX Shares, MicroSectors, and T-REX products, as well as REX..
Allspring Global Investments writes that as it builds an investment platform for the future, it has filed for exemptive relief..
LSEG Lipper writes that ETF promoters in Europe enjoyed estimated net inflows (+EUR25.1 billion) for May 2024...
The European Fund and Asset Management Association (EFAMA) has published its 2024 industry Fact Book, which includes a foreword by..

Related Articles

Marcus Wayerer, Franklin Templeton
Franklin Templeton says that emerging markets are navigating a tricky environment at the moment, due to factors such as the...
Matt Barry, Touchstone Investments
Back in 2022, Cincinnati, Ohio-based Touchstone Investments launched its first four ETFs, having previously been predominantly a mutual fund company....
CN Tower, Toronto
The winners were announced in the second ETF Express Canadian awards at the event held at The Quay in Toronto,...
Darren Jordan, Komainu
Custody specialist, Komainu, was launched in 2018 as a joint venture between Nomura, digital-asset investment manager, CoinShares and blockchain business,...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by