We register our deep concern about the suggestions in this consultation paper. Why?
- Fee structures are notoriously complex and usually disguised. Is the complexity of fee structures designed to mislead consumers?
- Annual performance fees allow managers to take a fee when performance is positive without the need to reimburse when performance is negative. Is the proposed system weighted towards incentivising managers to take on greater risk at no meaningful risk to themselves but at significant risk to investors?
- There is no strong evidence that management of any kind can provide superior performance in the long run. Do these proposals come from members of the fund management industry and advisors to pension fund trustees to allow them to improve their own profitability?
