The founder of a campaign for more transparent fund charges has called Investment Management Association (IMA) figures showing average fees to be about 0.3% as "misleading claptrap".
The IMA's tenth annual asset management survey found total industry revenues were £12bn, on assets of £4.2trn - figures chief executive Richard Saunders (pictured) said meant average clients were paying "a fraction over 0.3%".
But Gina Miller, co-founder of SCM Private, said Saunders' assertion was "absolutely ludicrous".
An analysis of 3,401 IMA active retail funds by SCM, headed by former Jupiter/ New Star investment trust and hedge fund manager Alan Miller, found that the most common annual management fee was 1.5% pa, with an overall average TER of 1.63% pa.
"Savers in the UK are being completely misled by hidden fees and charges and utterly false statements like this by the IMA show the depth of the problem," she said.
"If the IMA is to restore a modicum of respect back to this vital industry, it needs to stop behaving as the Artful Dodger from Dickens and start telling the truth for once."
The hidden costs of investment funds often amount to 1% a year, she said, with some funds charging significant up front charges or performance fees on top of the 1.63% pa average TER.
The real figure for fund fees and charges may therefore be closer to 3% pa for consumers, rather than the 0.3% pa alluded to by the IMA.
"The scale of hidden charging in the UK investment industry is a scandal and the IMA's continued attempts to pull the wool over both consumers' and regulators' eyes as to the true cost of investments is a disgrace," Miller said.
"We have to give 100% disclosure on all fund fees and costs, through one number that allows consumers to compare costs and performance across different fund managers and make an informed choice as to which product provides the best value for them.
"This is not a complex or controversial demand and it is entirely within the interests of the consumer. It is time the IMA understood that fund managers' £4.2 trn of assets is not their money, the funds belong to ordinary savers and pensioners and these people deserve real value and total transparency on what they are paying - not this sort of misleading claptrap."
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