Class systems and sharpening pencils: Why fund fees will never be equal

Assessment of Value

As fund boards enter the third year of the Assessment of Value process (AoV) I read with great interest the series of working papers from my good friend Sunil Chadda on ‘Unitholder Inequality’.

The headline was eye-grabbing since there has never been a universal principle of equality in asset management. Instead we have ‘Treating Customers Fairly' (TCF), ‘Value For Money' (VFM), ‘Assessment of Value' and soon to be some sort of ‘duty of care'. Lots of acronyms and guidance, abound, no equality mentioned anywhere. This is because there is no democracy to be found in asset management. Certainly not for our customers. Instead our business model is based on a caste-like system of hierarchies between fund buyers and sellers. Indeed, share ‘classes' are well named. Assets under...