Stephen Cranston Associate editor

There will always be debate about the fairness of investment management fees. In the early days, when the industry was dominated by trust companies and private banks, investors would be charged a professional fee, usually through an hourly rate. This might have made sense if the client base was relatively uniform, say a couple of dozen dollar millionaires. But in the more industrialised environment of the mutual fund it makes more sense to charge an ad valorem fee, which, in most jurisdictions, has settled at about 1% of assets every year.

Savers putting in R500 a month can hardly be expected to pay a R2,000 bill for services rendered.

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.

Questions or problems? Email or call 0860 52 52 00. Got a subscription voucher? Redeem it now