Arch Cru double-charging not properly disclosed

Just how did this fund gain FSA regulation? They need to be proactive rather than reactive. Its a good job they aren't a manager in the English Premiership as they'd have been sacked a long time ago.

This article may be true for direct investors into Arch Cru but when bought via Transact the funds were cheaper and the adviser commission was set by agreement between client and adviser - the few clients I placed into the fund were charged much less upfront and my ongoing was 0.5% - TER via Transact was less than 2.0% inc. my servicing fee.

Quite apart from this - does anyone have any idea what is currently happening?

This article is talking about another 1.8% or so per annum (taking reasonable assumptions for the custodians and so forth, and assuming a 5 year investment window), pushing the real TER up past 4% - and that is assuming no performance fee being payable. Which is a little eye watering. However I have to admit that it is likely to actually be a fairly common occurrence amongst some of the more 'specialist' offshore offerings.

Whilst we/our clients have not been burned by Arch Cru, that may have been luck, and we have tightened our diligence in terms of 'new whizzy' funds promoted which provide particular performance characteristics. We do regularly find little extra charges slipped in, 0.5% here, .33% there - it does add up, and make the proposition trickier. Surprisingly few are either entirely honest in their disclosure or mathematically competent in their calculations, especially in the marketing departments.

We have been expecting an update from Capital or ARCH at the end of June 09, but it seems there is little information to hand to manage clients expectations.

If anyone knows the latest, we would appreciate it?

Robert - I'm with you on this for many of my clients are with Transact on a similar agreement as yours.

Why do the FSA not appreciate that charges etc. are a fundamental issue with firms/individuals? Buying the fund with maximum charges/commissions would be extremely difficult at best to justify to a client. Not something I would want to be part of!! No pity from my end on those who went down that route!

It's bad enough now with c.10% reduction in values with no obvious or apparent light at the end of the ever lengthening tunnel.

Comments above re Transact or any other wrap have missed the point - this was an additional layer of undisclosed charges which affects all investors no matter how the units/shares were bought.

However, there is a different and very grey area involving wrap which is the degree of 'due diligence' required from providers before making a fund available through their products. In theory, wrap advertises itself as 'open architecture' (i.e. whatever you want to invest in that is legal) thus passing the buck firmly back to the client and adviser but the legal position on the 'duty of care' required would suggest otherwise.

When is Citywire going to stop letting their personal feelings (Gavin Lumsden) get in the way of their judgement.

The Cell funds referred to are not funds they are Equities.

In the interests of fair play could you now publish a list of OEICS that include the running costs of the Equities that they invest into?

Or do you not understand the question?

Yes Dave, Citywire has always had a negative stance on the Cru funds, as have other organisations...... the Cru approach has always been to accuse the the doubters of not understanding the funds!

Hell, the chickens have well and truly come home to roost. Its a damn shame for clients that their IFAs believed all the hype from Jon.....

Utterly terrifying and gives the whole investment industry a bad name........ I assume that eventually someone will be shown to have cocked up, and either Capita or BNY will have to get their hands in their pockets??