Australian and US investors are paying significantly higher investment management fees than their counterparts in the United Kingdom and Europe, according to a survey conducted by Watson Wyatt Research.
The research primarily concentrates on the UK and European environment where it says fees paid by retirement funds to external investment managers across all asset classes and regions have generally remained stable, although with some downward pressure over the past three years.
It says its findings tend to dispel the perception that the shift to specialised management and growth in core-satellite approaches are providing upward pressure on fee structures.
Watson Wyatt’s global head of investment consulting, Roger Urwin says that given the phenomenal structural developments and changes that have taken places recently it is surprising to see fee rates have remained largely unchanged.
“In addition, more flexible fee structures are emerging, typifying a marketplace which is becoming more competitively efficient,” Urwin says.
However looking at the survey’s other findings, he says it revealed that US and Australian retirement funds, on average, pay significantly higher investment management fees than their European and UK peers, typically twice as much.
The Watson Wyatt data says that in the US this is explained by the use of generally more complex investment structures.
