A fund manager is applauding a decision by the Financial Markets Authority to dump its proposal for Kiwisaver managers to be subject to negative performance fees.
A draft guidance note last November proposed that fund managers should share in the losses as well as the profits from the investments they manage on behalf of clients.
But in its final guidance note on performance fees last Friday, the FMA ditched the idea after opposition from money managers.
Harbour Asset Management portfolio manager Andrew Bascand says a negative performance fee is not needed.
He says a proposed cap on performance fees when investments are performing well is one way of ensuring investors are being treated fairly in the amounts fund managers charge.
An advisor to the superannuation industry Jonathan Eriksen agrees with Mr Bascand.
He says investors will desert Kiwisaver managers if they fail to perform, and that should be punishment enough.
