The Association of British Insurers (ABI) has issued a blow to Paul Myners' report on UK institutional investment by urging the government to rethink proposals to end broking commissions.
The ABI call follows a similar move by the National Association of Pension Funds (NAPF) which urged the Government towards independent academic research in to the area before committing to the draft principle.
According to a spokesman for the ABI, “present proposals could harm the interests of pension fund members and increase their costs”.
Under Myners’ recommendations broking commissions for share dealing and research would be included as part of the fund management fee.
The ABI refutes this proposal on the following grounds:
- that it could encourage a shift to net trading, thereby reducing transparency of fees for pension funds;
- that it could cause a trend towards consolidation of fund management at the expense of small cap companies;
- that it could promote higher research charges and a possible reduction in research activity in mid and small cap companies.
By Madhu Kalia
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