Hargreaves Lansdown chief executive Ian Gorham has urged regulators to force asset managers to pass on fewer costs to investors and be more transparent on fund charges.
Gorham, who is to depart from Hargreaves next year, says asset managers should not overcharge investors and exclude other costs from the current single fee, such the price of research, audit, legal costs and fund administration costs, the FT reports.
He says: “The way it’s set up at the moment is not as transparent as it could be.
“There should be one charge and asset managers should have to pay all the costs of running the fund out of that charge. At the moment, it’s not always the case that they do.”
Gorham says there “should be a change in the way things work.”
He says: “I think the regulator should come in and put rules down about this.”
Gorham’s comments follow the FCA’s plans to scrutinise asset managers on the way they disclose transaction costs to workplace pension schemes.
The regulator has also proposed to ban firms from accepting payments from third party firms on investment research.
This year, star fund manager Neil Woodford also stopped charging investors for research.