For immediate release: Thursday, 24 April 2008

PERSONAL ACCOUNT CHARGES MUST BE CLEAR AND TRANSPARENT

Responding to the Personal Accounts Delivery Authority's (PADA) consultation, ‘Building personal accounts: choosing a charging structure', the Investment Management Association (IMA) is calling for a structure based on an annual management charge (AMC).  This is a fair and transparent charge which will help to encourage individuals to remain in the scheme.  IMA believes using only a "contribution charge" should not be considered further because of the risks it poses for both scheme members and the financing of personal accounts. 

An AMC structure also has the key advantage of being compatible with existing commercial practices and would benefit employers and scheme members by providing maximum transparency and comparability.

Commenting, Richard Saunders, Chief Executive at the IMA, said:

"Given the public scrutiny that Personal Accounts are likely to come under, any charging formula that appears unfair to consumers could damage perceptions of the Personal Accounts scheme. It is therefore essential that the charging structure is fair, simple and transparent, while also being readily comparable with commercial products and schemes.  This is why an annual management charge structure is the best option."

A copy of IMA's response can be viewed here.

-ENDS-

About IMA
The IMA is the trade body for the UK's £3,100 billion asset management industry.  The money its members manage is in a wide variety of investment vehicles including authorised investment funds, pension funds and stocks and shares ISAs.  Its role is to represent the industry and promote high standards.

For further information, please contact:
Noreen Shah, Press Officer, IMA, 020 7831 0898

Out of hours:
Mona Patel, Head of Communications, IMA, 07834 089 332