FCA has fined Henderson Investment Funds Limited (HIFL) nearly £2m for failure to treat fairly over 4,500 retail investors in two of its funds, thereby breaching Principle 6.
FCA found the funds’ investment manager, Henderson Global Investors Limited, had decided, in 2011, to reduce its level of active management of the funds. HIFL told nearly all affected institutional investors and offered to manage the funds for them at no charge, but did not in any way communicate the change to retail investors. As a result the investors were charged the same level of fees as they had been when the funds were actively managed, for nearly 5 years.
FCA commented that not only was the fee level inappropriate for what had become closet tracker funds, but the seriousness of the behaviour was aggravated by the length of time it took the firm to identify the issue and fix it (by compensating customers for the additional costs).