UK - UK multi-manager IMS intends to unbundle the fee structure of the MM part of its operation, acquired earlier this year from Threadneedle, in order to increase transparency for clients.
The London based multi-manager said the move would lay down the gauntlet for other multi-managers in the UK to reveal the true nature of their relationships with their selected managers.
Antony John, managing director of IMS, said the approach of bundling fees had “added to the myth” of multi-managers and their relationships with asset managers.
He said: “Bundled fees can actually be restrictive. This is because some managers are worth paying higher fees for. This is the way that IMS works and prefers to work.”
However, he said he did not wish to go down the road where multi-managers were purely competing on price. “We must not get to the situation where people know the price of everything and the value of nothing,” he said. “In fund management you always get what you pay for.”
John said in cases where IMS and MM had pre-arranged confidentiality arrangements with fund managers, an aggregate fee would displayed.
Rival multi-manager outfit SEI refused to comment on the issue of unbundling of fees, though Richard Dinham, senior investment executive at Investment Solutions, said he had not sensed an appetite from either consultants or clients for such a move.
“It is something we would probably look at if clients felt they needed it,” he said.
Consultants broadly welcomed the news. Andy Cheseldine, investment consultant at Hewitt, said IMS’s move could lead to greater transparency from other multi-managers.
“The ones who won’t want to [unbundle fees] are the ones who have something to hide,” he said.
“When you can see where the costs are going, by definition it’s more appealing because you make your own decision on whether something is good value. Unless you have a view where the costs are, it is very difficult to make any decision.”
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