Interesting article that appeared in the Guardian newspaper on Friday the 4th November. Here is the link below to the full story and comments also follow after from different online readers.
I've included some paragraphs directly as below....
link - http://www.guardian.co.uk/money/2011/nov/04/investment-funds-hidden-fees
" An investor who puts £10,000 into the stock market over 20 years, and sees share prices grow at an average of 7% a year, will get back around £22,770. But the fund managers, financial advisers and up to 16 layers of other fee chargers – such as stockbrokers, lawyers, accountants and custodians – will take £15,927 from the fund over the same period."
"The figures come from David Norman, formerly chief executive of Credit Suisse Asset Management (UK), who is campaigning for transparency and fairness in fund management. He exposes a raft of practices in the industry which are leaving small investors short-changed"
"His core allegation is that fund managers only disclose the investment management component of the fund costs, not the total running costs. The annual management charge is typically quoted as 1.5%. Out of this comes a payment to the financial adviser who recommended the fund, and is paid every year even if the adviser is never in contact with the customer again. This amount is typically 0.5% of the fund. About 0.25% a year is taken by the trading platform on which the fund sits, such as those run by Cofunds, Hargreaves Lansdown or Fidelity. The fund manager keeps the rest, usually about 0.75%."
I've included some paragraphs directly as below....
link - http://www.guardian.co.uk/money/2011/nov/04/investment-funds-hidden-fees
" An investor who puts £10,000 into the stock market over 20 years, and sees share prices grow at an average of 7% a year, will get back around £22,770. But the fund managers, financial advisers and up to 16 layers of other fee chargers – such as stockbrokers, lawyers, accountants and custodians – will take £15,927 from the fund over the same period."
"The figures come from David Norman, formerly chief executive of Credit Suisse Asset Management (UK), who is campaigning for transparency and fairness in fund management. He exposes a raft of practices in the industry which are leaving small investors short-changed"
"His core allegation is that fund managers only disclose the investment management component of the fund costs, not the total running costs. The annual management charge is typically quoted as 1.5%. Out of this comes a payment to the financial adviser who recommended the fund, and is paid every year even if the adviser is never in contact with the customer again. This amount is typically 0.5% of the fund. About 0.25% a year is taken by the trading platform on which the fund sits, such as those run by Cofunds, Hargreaves Lansdown or Fidelity. The fund manager keeps the rest, usually about 0.75%."