Regulator to review fund charges which 'harm' consumers

The new-look regulator is to carry out a review of the 'increasingly complex' charges on UK funds as it is concerned they may be harmful to consumers.

In its Business Plan for 2013/14, the Financial Conduct Authority (FCA) noted fees on UK funds have increased over the last decade, while additional ‘hidden' fees have been attached to funds. It also said overall charging structures have become more complex as performance fees have become more common. The regulator said there is evidence fee structures exploit consumers' behavioural bias, a key cause of risk. For example, firms may: • use complex fee structures that make price comparisons difficult; • apply more complex fee structures to retail customers than institutional clients;...