A lack of competition and ‘cartel-like’ pricing mean UK retail investors pay an average of 58% more than US investors for the same investment products, says a new report.
Named Legalised Looting, the report by lobby group the True and Fair Campaign says the difference in prices costs UK retail investors over £1 billion (€1.2 billion) a year more than their US peers.
“After reading this report, savers should be up in arms and demand to know why successive governments and regulators have allowed these scurrilous practices to continue,” says Gina Miller of the True and Fair Campaign. “For over ten years US investors have had a much fairer deal, and benefited from an investment industry with higher standards and ethics.”
Miller told Funds Europe that a lack of transparency over costs and the layering of charges due to excessive intermediaries also apply to funds markets across Europe.
She notes that regulations such as the Markets in Financial Instruments Directive and new rules for packaged retail investment products are attempts to solve the problem but still have some way to go.
“Instead of just lancing the boil, there need to be practical but fundamental changes in terms of transparency of cost and holdings to ensure the anti-consumerism operating across the pensions and investment industries is surgically removed,” she says.
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