NAPF joins attack on soft commissions

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The Independent Online

One of the most powerful voices in the City yesterday gave its backing to the regulator's crackdown on ambiguous fund management charging structures.

The National Association of Pension Funds (NAPF), which represents about £700bn of institutional investments, yesterday said it supported the outlawing of soft commissions, in which fund managers pay for third party services such as data systems. It also wants an end to bundled charges, which roll in the cost of in-house research.

Both practices are high on the Financial Services Authority agenda. Sir Howard Davies, the former chairman of the FSA, last week told The Independent that the regulator was determined to end the arrangements, despite fund managers' protestations.

The regulator has been consulting with the industry on how to make charges between brokers and fund managers more transparent.

As part of its submission to the FSA, the NAPF yesterday said unbundling charges would lead to greater accountability and allow pension funds to control what they pay for. It also said the economies of fund managers and brokers would "change profoundly for the better".

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