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
ASIC has permanently banned a financial adviser after he allegedly concealed information from clients and misused client funds, among other breaches.
Disgraced adviser Joshua Fuoco described himself as the “biggest monkey” at AFSL Group and provided financial advice via WhatsApp, all while being banned for 10 years, court documents show.
The Compensation Scheme of Last Resort has released the FY26 revised levy estimate, but the FAAA is concerned costs will be pushed into the following year.
Former Iress chief executive, Andrew Walsh, has been promoted to chair of a boutique Sydney advisory firm, having stepped down from the same position at Mason Stevens.
