UK - UK pension schemes are the least satisfied with the value-for-money they get from fund managers, a study by Watson Wyatt reveals.
The consultant’s study suggests competition has curbed fee rises and schemes generally enjoy a better deal than five years ago.
Its survey of 240 institutional investors worldwide and 50 fund managers found the increased use of more sophisticated and fund-specific benchmarks had not been matched by an increase in fees.
Watson Wyatt global head of investment consulting Roger Urwin said: “Given the phenomenal structural developments and changes that have taken place recently it is surprising, yet not unwelcome, to see fee rates largely unchanged.”
One-third of respondents to the survey said fees had been the decisive factor in a selection process and half claimed costs were somewhat or very important in such a process.
UK pension plans differed from other countries in that they were the least satisfied with their existing fee arrangements and one-in-five felt they did not get value for money.
The UK also had the stron-gest appetite for performance-based fees although Watson Wyatt felt the proportion was still too low.
Urwin said: “It is clearly in pension fundsí best interests to understand better the motivations, incentives and alignments of interest in the investment manager industry and to seek value for money from their arrangements. Considering the use of performance-related fees would be a good first step in this direction.”
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