Gina Miller urges FCA investigation into fund management 'price fixing'

Businesswoman and investment campaigner says there is no genuine competition among fund groups

Gina Miller, the businesswoman who rose to fame after taking the government to court over Brexit, is demanding that City regulators investigate what she alleges is “price fixing” by the UK fund management industry.

Miller researched 683 funds with £320bn under management, and found that seven out of 10 had identical charges, “indicating no genuine price competition”.

The research is the latest attack on Britain’s fund management industry by Miller, who in 2012 set up the True and Fair Campaign. It has called for more transparency and an end to hidden fund charges and mis-selling in the City of London’s asset management industry.

Miller, who runs SCM Capital with her hedge fund manager husband Alan, said the vast majority of funds sold to small investors charge an annual management fee of 0.75%. She called it “proof of anti-competitive behaviour within the active UK fund management industry”, adding: “The regulator should investigate to determine whether some form of price collusion, whether formally or informally, is being undertaken by major fund groups.”

If fund groups were less clustered around the 0.75% figure and charged just 0.1% less, investors would save £488m a year.

“It is surely time for both the Financial Conduct Authority and the Competition and Markets Authority to investigate price fixing in UK retail actively managed investment funds,” Miller said.

Her accusations come at a time when the fund management industry is under the FCA’s spotlight. The financial watchdog is currently undertaking a market study into the industry, and interim findings published in November found weak price competition in a number of areas.

The FCA also found “considerable price clustering”, with a reluctance among firms to undercut each other and a failure to pass on economies of scale when funds increase in size. It also noted “poor practice” when it came to ensuring that clients were receiving value for money for research and trading charges.

It said fund firms should charge a single fee so investors could see how much they were being charged.

A spokesperson for the Investment Association said: “The investment management industry is committed to serving the needs of savers and investors globally. We support the FCA’s Market Study objectives to ensure that competition in the industry works to the benefit of its customers, whether individuals, families or institutions.

“We continue to engage closely with the FCA to understand its findings and the full implications of potential remedies.”

Contributor

Patrick Collinson

The GuardianTramp

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