Yahoo Finance Anti-Brexit campaigner Gina Miller accuses fund management industry of price fixing
SCM Direct the investment management group founded by Alan Miller and Brexit challenger Gina Miller are accusing the UK fund management industry of price fixing.
The UK fund management industry has £5.7 trillion assets under management (AUM) at the end of 2015 according to the Investment Association.
What is the evidence of price fixing?
SCM Direct researched 683 funds with a combined assets under management of £320.5 billion and found there to be no price competition.
Findings show around 73% of actively managed equity funds charge an identical annual management charge of 0.75%; indicating there is no genuine price competition.
SCM Direct claims their findings are proof of “anti-competitive behaviour” within the UK active fund management industry and due to the lack of competition the industry will suffer.
SCM Direct appeal to the FCA to investigate charges
The investment firm is now appealing to both the Financial Conduct Authority (FCA) and the Competition and Markets Authority (CMA) to investigate prices.
Mr Miller says: “The regulator should investigate to determine whether some form of price collusion, whether formally or informally, is being undertaken by major fund groups. Agreements between competitors to fix prices is regarded as one of the most flagrant breaches of competition law.”
Last year the FCA criticised the asset management industry for weak competition in the active fund sector. The regulator has acknowledged, ‘there is considerable clustering of prices for active equity funds at both 1% and 0.75% for clean share classes.’
Written by London-based journalist Tanzeel Akhtar. Her work has been published in the Wall Street Journal, FT Alphaville, CNBC, Citywire, Euromoney, Interactive Investor.
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