John McLachlan, himself a senior fund manager, who chaired a National Association of Pension Funds working group on investment management fees, said the group's findings provided 'a hard-hitting indictment of the (fund management) industry'.
The group had uncovered 'pretty hard anecdotal evidence of hidden fees and lack of disclosure'. Most fund managers were at fault, he said.
Mr McLachlan told the NAPF investment conference at Eastbourne, Sussex, that fund managers were failing to explain the services they provided for the fees they charged. He questioned fund managers' use of their own banking or market-making affiliates.
On cash management, he said: 'You are not trying hard enough to be whiter than white. There is great suspicion regarding your practices.'
He said management agreements should be more explicit about how commission earned on the sub-underwriting of share issues should be allocated to clients' funds.
Earlier, John Morgan, retiring chief executive of the Investment Management Regulatory Organisation, said pension scheme members should be able to take their complaints to a single regulator with the power to remove trustees and appoint replacements.
He also suggested that constraints should be imposed on the investment of pension funds 'to secure a protective element of portfolio diversification . . . that is calculated to make any red-blooded fund manager shudder.'
He said trustees should be independent to prevent employers controlling or unduly influencing their decisions. He also suggested that in future trustees should be independent of unions.
Mr Morgan said what he was proposing looked like the Occupational Pensions Board 'enhanced out of all recognition'.
The regulator would have no involvement with fund management, which would remain Imro's responsibility. Imro had acknowledged its failings in the Maxwell disaster and had worked hard to put them right.
He admitted that none of the structures he described would have stopped Robert Maxwell, but claimed they would have made his thefts more difficult.Reuse content