ESMA Puts Performance Fees Under the Microscope

The European regulator has launched a consultation into fund performance fees to ensure investors understand what they are and how much they cost

Holly Black 17 July, 2019 | 12:25PM
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The European regulator has launched a consultation into fund performance fees. There are concerns that some funds are not making it clear enough to investors that they may pay a performance fee, how this is calculated or how such charges can eat into returns.

The European Securities and Markets Authority (ESMA) wants to introduce a common set of standards to align how funds communicate any performance fees to their investors. The organisation said there are different disclosure practices across EU member states, which creates “undue risks” and “inconsistent levels of investor protection”.

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About Author

Holly Black  is Senior Editor, Morningstar.co.uk

 

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