The Association of Investment Companies (AIC) will replace Total Expense Ratios (TERs) on investment trusts with an "Ongoing Charges" figure from the end of May. The change, critics say, will only create further confusion for investors without improving transparency on fees.
The ongoing charges figure does not include entry or exit fees, performance fees or the costs of trading the underlying portfolio.
The AIC initiated the change after its members raised concerns about inconsistencies and confusion created by the wide range of TER data available online, which is based on variety of different methodologies. The new methodology also takes into account European regulatory developments which will affect the way in which expense ratios are calculated across the wider funds market and require these figures to be published in a key investor information document (Kiid).