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10/23/2006: "More tall stories about industry costs "

FTfm editor Pauline Skypala reports in today's weekly review of the fund management industry that indpendent consultants Oxera have supported (in a report out later this week) the Association of British Insurers' claims that an industry-led model for the new National Pensions Savings Scheme will not have higher costs than the centralised model (with competition by contract bids) favoured by the Turner Commission. The report was commissioned by the ABI. Apart from being fed up with spurious assumptions from independent consultants that transparently serve the vested interests of their paymasters, I shall be particularly keen to see how Oxera arrived at one assumption Pauline refers to. If marketing costs of 2% of revenues are plausible for an industry-led model , how come the ABI members currently load selling costs of more than 2% of assets onto their investment products - a difference of at least 30 times!