Friday, 3 February 2012

'The investment industry has been ripping off customers for far too long'

Alan Miller, founder of low-cost fund business SCM, has launched a campaign calling for greater transparency on investment fees and charges.

By Rosie Murray-West4:01PM GMT 31 Jan 2012

The True & Fair Campaign argues that the investment industry has been "ripping off customers for far too long".

"The British public faces a minefield of hidden charges," Mr Miller said, adding that people were being left "seriously out of pocket" with regards to their pensions and other investments. He said that investors were entitled to know what they were being charged.

The campaign comes the day after Fidelity warned about the emergence of "Ryanair" fund pricing – where people are charged what looked like a low upfront fee and then end up paying more on top of it. "We know investors are concerned about charges and they are becoming more complicated," he said.

SCM is launching a True and Fair Code and Labelling Scheme, allowing investors, for the first time, to compare investment products and providers with a clear breakdown of costs and fees.
Mr Miller said the new code will provide 100pc transparency by showing the whole range of fees and the resulting all-cost for investment, which will be known as the Total Cost of Investment (TCI).

However, Gary Shaughnessy, Fidelity Worldwide Investment UK managing director, said that SCM itself was guilty of 'Ryanair' pricing on some funds, because only those with large amounts could invest.

Mr Shaughnessy said: "A consistent way of showing charges is essential to restoring investors' trust in the industry and encouraging them to feel confident to save for the future."

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