Limited information about annual operating costs of funds in the UK mean that investors are often unsure how much fund ownership actually costs, one expert has claimed.
Christopher Traulsen, director of fund research at Morningstar UK, said that a lack of disclosure means that investors cannot determine what they are paying for.
As a result, fund companies "do not have much incentive to compete on price in any one area", he remarked.
Meanwhile, Bob Freeman, business development manager at Morningstar Adviser Services, said that the fund industry needs to "play its part" in the overall move towards enabling consumers to become "better informed".
Costs and charges ought to be explained "fully, clearly and accurately" to ensure that investors are able to make the correct decisions, he added.
The latest figures produced by the Investment Management Association revealed that during the second quarter of the year total investment funds under management reached £463 billion.
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