Fund fees in 2014: Is the price right?

REGULATION

As we head into 2014, fund managers are facing a new world with reduced margins. James Budden, director of distribution at Baillie Gifford, argues it is a sacrifice worth making.

The fund management industry is facing inexorable pressure on margins. The price of managing money simply has to come down. The industry is besieged on all sides – politically, through regulation, and by market forces. It is a global phenomenon. In the recent past, assets under management have continued to grow around the world, but fund managers’ fee income has reduced. Perhaps the industry has been feasting from the trough for too long – where are the customer’s yachts and all that? Like it or not, we are bracketed with bankers as ‘them what done it’. Investors are constantly told...