Higher fees, same alpha
The imposition of fees is driving the cost of investing up, according to ratings house Morningstar.
In its latest assessment of Small Cap Australian Share Funds, Morningstar has noted that management fees have been on the rise, with retail fees rising to 2 per cent, while wholesale fees rose to 1.21 per cent.
“As all managers in this space (Small Cap Australian Shares) have limited capacity, many have restricted the amount of institutional mandates given the more attractive margins in retail — hence the hike in fees virtually across the board,” the Morningstar assessment said.
It said many managers had used the ‘limited capacity’ argument to increase fees and while this had some credence, the reality was that industry investors were now paying more for the same amount of alpha.
AUTHOR
Mike Taylor
Recommended for you
Wealth Data has revealed the top five licensees for financial adviser growth over the September quarter, with more than 150 advisers joining in Q3 overall.
Former Sydney financial adviser, David Valvo, has pled guilty in court to a charge of dishonest conduct.
Building a network of mentors and coaches with varied skill sets could help women achieve their career goals, according to an FBAA executive.
AMP has reported its Q3 results and provided a progress update on the divestment of its advice division to Entireti.
