Date: 30th January 2018
In 2016 the Investment Association (IA), a UK-based organisation representing investment managers, published a report that dismisses claims that there are or were hidden fees charged to investors in financial products, in particular related to mutual funds. Renamed ‘The Loch Ness monster of investments’, the study indicates that all charges applied to investors are clearly indicated in the annual report of the funds, signaling that those who have raised such claims ‘fail to identify conclusive signs of their [hidden costs’] existence’, according to the FT (here).
Well, MiFID II lured Nessie out of hiding as fund managers were forced to start disclosing more information on ongoing fees that are not applied directly by them, but which eat into investors’ returns, such as transaction fees for stockbrokers (here), ‘bank set-up costs’ or ‘tax advice fees’ (here). Following this revelation, Andy Agathangelou of the UK Transparency Task Force (TTF), an independent organization ensuring transparency in the finance industry, addressed a letter to the chief of IA (in which he copied the British Prime-Minister and the head of the UK FCA) publicly requesting him to apologise to investors.