True and Fair Campaign Welcomes Intervention by Ed Miliband
TRUE AND FAIR CAMPAIGN WELCOMES INTERVENTION BY ED MILIBAND
Commenting on Ed Miliband’s pledge to challenge “rip-off” pension companies which are halving the value of pensions by imposing high fees, Gina Miller who spearheads the True and Fair Campaign said: “We welcome Ed Miliband’s pledge to challenge the “rip-off” pensions companies who impose unnecessarily high and hidden fees on consumers. For too long, British consumers have been comprehensively misled by the UK investment management and savings industry. It is time for government to bring in change and impose transparency on the industry to restore trust and honesty.
Miller says, “on pension fees, what is misunderstood is that whilst the pension ‘wrapper’ fees may typically be between 0.5 – 1% pa, it is the underlying high fees of the funds invested in, inside the wrapper, that can significantly erode returns. It’s like buying a health food bar and finding out when you read the label that is actually has more calories than a normal chocolate bar.”
A recent report by SCM Private on 1,287 individual pension funds in the UK found the average individual pension fund has a portfolio turnover of 128% each year, incurring extensive costs from the price difference for buying and selling an asset as well as from taxes and commissions. The pension funds analysed by SCM Private disclosed an average 1.34% annual management fee, on top of which typically comes administration costs of around 0.3% and buried dealing costs which are typically over 0.5% pa. A total of 2% pa may not sound much but it amounts to nearly half a person’s pension pot disappearing over 20 years.
Over the last six months the True and Fair Campaign has been calling for a new Code of Conduct that would give consumers 100% transparency on all costs and management fees and full disclosure on where funds are invested.
“I hope that the groundswell of support among politicians, both in the UK and Europe, for the principals of the True and Fair Campaign, will force the pace of change within the industry.
Consumer protection is such a fundamental issue that it needs to be embraced by all parties. We need to protect people who are acting prudently and responsibly by saving for their future and their families.”
The True and Fair Code
Company XYZ commits to providing clients with a full breakdown of all fees incurred during the investment of their money, including management fees and all underlying costs or charges.
Company XYZ commits to providing clients with a full online breakdown of all holdings held directly, as well as indirectly (e.g. individual assets held as collateral against securities lent out), together with a full percentage breakdown, online, on at least a quarterly basis.
For further information please contact:
Gina Miller, Founding Partner
SCM Private LLP
Tel: +44 (0)207 838 8650
Twitter: @TrueandFair2012 #TrueandFair
Posted By: True and Fair, 2:19 pm