Crackdown on Fees Investors Are Charged Continues As Fund Manager Henderson Fined £1.9 Million
The FCA has made a move to reinforce its
An FCA investigation found that 4700 investors in Henderson Investment Funds were charged for active fund management between 2011 and 2016 when the funds were in fact simply passively tracking stock market indices. At the time, Henderson, which has subsequently become part of the larger Janus Henderson after the 2017 merger between Henderson Global Investors and Janus Capital Group, did inform institutional investors in the funds effected it was reducing the level of active management and, as a result, the fees it charged. However, the company did not inform the smaller retail investors in the same funds.
The FCA found that a redundancy
The Henderson fine follows on from a 2018 FCA
“This should send shivers down the spine of many investment management companies. The FCA is making an example of Henderson with this fine. That should be a warning shot to all those businesses offering products that are not being actively managed but are claiming to do so. This is far from an isolated case. Companies like these must face heavy fines to stop all active managers getting a bad name.”
It is reported that at least one further investment manager is currently being formally investigated by the FCA for also continuing to charge active fees despite their funds moving to a passive approach. Another several companies have been “written to”. Ryan Hughs, AJ Bell’s head of active portfolios views the FCA crackdown as a positive development and one that brings the UK’s approach to fund fees more in line with that of other European countries:
marketsregulators have been very active around closet trackers, with Norway, Sweden and Germany all seeing action being taken against managers. This is an important step forward in the UK, demonstrating the importance of asset managers justifying the fees being charged for supposed active management.”
Last year, the FCA
“Janus Henderson Investors
acceptsthe FCA’s findings and the financial penalty and has co-operated fully throughout the process. Affected clients had already been separately contacted and fully compensated.”
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