Investment managers are earning up to 70% more from pension schemes than they were six years ago, according to LCP's Investment Management Fee survey.
The survey shows that while average headline fee rates have fallen in 60% of asset classes since 2011, this has not been enough to offset the revenue-boosting benefit of investment market growth.
LCP said this highlights how active managers are rewarded by simply retaining assets and not necessarily to achieve outperformance.
Matt Gibson, partner and head of investment research at LCP and author of the report, said the rise has been driven primarily by rises in equity and bond markets.
"Investment managers have done very well out of increases in assets under management in recent years," he said.
"While we welcome the reduction in fee rates in many asset classes, overall, investment managers are charging much more but don't seem to be doing more."
Gibson added that the findings showed how important it is for pensions schemes to regularly monitor their investment managers and put negotiating pressure on them to reduce fees.
The survey looks at total costs for a £50m investment across the most popular asset classes used by the firm's clients.
For DC pension schemes, the survey identified the benefits of using platforms over accessing funds directly, and found a lack of consistent and transparent reporting on transaction costs.
Some asset managers only provided information on explicit trading costs – such as broker's commission and stamp duty, while others attempted to quantify implicit costs such as dealing spreads and the impact of the fund's transactions on the market price of a security.
The difference in minimum and maximum reported transaction costs from UK equity mandates varied widely with costs ranging from £20k to £400k for a £50m mandate.
LCP said that regulatory changes may pave the way for managers to become more open about hidden costs.
"First, the FCA is in the process of setting out guidelines on the information asset managers must provide DC schemes on how transaction costs are calculated," said Gibson.
"Second is a MIFID II rule, tightening the regulations on broker commission costs related to research."
First published 13.04.2017