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Vanguard managed $4 trillion in assets at the end of January
2017, mainly in low-cost passive funds, a spokesman said. Around
$1 trillion of this is in active funds, the spokesman added.
The suggestion formed part of its response to Britain's
regulator, the Financial Conduct Authority, which in November
released its interim findings into the asset management industry
as it looks to boost competition and value for money in the
sector.
"Performance is a potential. Costs are a certainty, hence
investors should focus as much, if not more, on costs," Sean
Hagerty, Head of Vanguard’s European business, said in a
statement.
"A 'health warning' on the impact of costs would be a clear sign
of intent from the industry that it's putting the needs of the
investor first."
Warnings on fees should receive equal prominence to current
warnings on past performance not being a reliable indicator of
future results, Vanguard added.
The FCA said last year it planned to overhaul the way Britain's
7 trillion pound ($9 trillion) asset management industry
operates to ensure both retail and institutional investors get
value for money.
The regulator flagged widespread concern about the performance
of actively-managed funds relative to the fees charged, the
level of competition in the industry and the information shared
with investors to help them make decisions.
Among its solutions were one "all-in" fee so investors can
easily see what is being taken from the fund by the manager.
The watchdog's final report, along with any proposed rule
changes, is expected to be published in the summer. The deadline
for consultation responses was Monday.
($1 = 0.8028 pounds)
(Editing by Ruth Pitchford)
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