UK - Schemes looking to cut investment costs through the use of pooled funds actually face 30% higher annual manager fees, Lane Clark & Peacock warned.
In a survey of 68 UK-based investment managers, the consultant found savings associated with pooled funds can be "illusory" because higher indirect costs - including up to 30% higher fees per year - are passed on to clients.
LCP said it was disappointed that almost one third of managers failed to disclose this information to their clients.
The research - which covered managers responsible for 80% of UK occupational pension fund assets - also found UK schemes could save £100m in investment manager fees if they toughened their negotiation stance.
LCP partner Mark Nicholl urged trustees and advisers to challenge their managers to justify high fees.
He said: "Our report reveals that trustees and their advisers should demand that investment managers make changes and demonstrate value for money.
"The good news is that trustees are increasingly aware that investment management fees vary widely and that there is a need for them to negotiate better terms on behalf of their scheme members.
"I also urge managers to be bolder in the fee bases they put forward, as there should be a greater element rewarding ‘real' added value."
LCP said fees for alternative asset classes such as infrastructure and fund of hedge funds were higher than traditional equity and bond mandates.
However, the firm added despite a greater allocation to alternative asset classes, there had not been a significant increase in total fees as they have often been implemented with an increased allocation to cheaper passive management.
Performance-related fee arrangements were described as "unattractive" because they tended to skew rewards in favour of the investment manager.
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