EUROPE - The European fund industry has been called upon to improve fee disclosure requirements by the fund research company Fitzrovia International.
Fitzrovia’s appeal follows recent comments by New York Attorney General Eliot Spitzer that the US mutual fund industry charges exorbitant fees.
“While mutual funds in the US have had to disclose total expense ratios (TER) for many years, there is still not a regulatory requirement for a consistent calculation across Europe,” Fitzrovia said.
The research company welcomed the move by some European funds associations to encourage their members to disclose TERs or to publish Fitzrovias own figures themselves.
Spitzer’s recommendations include an obligation on fund directors to make public a meaningful analysis that supports the fee arrangements that they have approved - supporting their current fiduciary duty to ensure that fund fees are reasonable.
Paul Moulton, Fitzrovia’s Chief Executive said: “If similar plans were adopted on this side of the Atlantic, they would be of great benefit for European investors.
“The industry would be complacent to think that Spitzer-style accusations about fees will not eventually be levelled at it, even though there might be no justification for such concerns.”
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