Brexit challenger Gina Miller’s firm condemns active fund management industry for having “no genuine price competition”
Brexit challenger Gina Miller has condemned the active fund management industry for having “no genuine price competition”.
SCM Direct, an investment management group co-founded by Miller, today released research showing 70 per cent of actively managed equity funds charge an identical annual management charge (AMC) of 0.75 per cent.
Read more: Two ways investors can cope with uncertainty
The report, which is part of Miller’s True and Fair campaign for more transparency in the investment industry, said this indicates no genuine price competition in the industry.
SCM believes that, as well as this being a detriment to UK investors, it also contravenes rules set out by the Financial Conduct Authority (FCA), which is due to set out new rules for the industry in the coming months.
The report said:
SCM Direct believes their findings are proof of anti-competitive behaviour within the active UK fund management industry, and the regulator should investigate to determine whether some form of price collusion, whether formally or informally, is being undertaken by major fund groups.
Read more: Investors are preparing to inject more cash into private equity this year
For the research, SCM analysed 683 funds with combined assets under management (AUM) of £320.5bn.
SCM found 70 per cent by number and 73 per cent by value of actively managed equity funds charged 0.75 per cent.
The report said that if this was reduced by 0.1 per cent, i.e. from 0.75 per cent to 0.65 per cent, UK savers and investors would be £488m better off every year.
Miller is best known for her legal battle with the government over Article 50 and Brexit.