Around 30% of defined contribution pension scheme investment providers are unwilling to provide details of the indirect costs associated with the funds they manage, according to research published by LCP yesterday.

The consultancy's DC fees survey of over 300 funds also found that total costs for fund management could amount to more than 100% higher than the annual management charge quoted to pension scheme trustees and company management.
For diversified growth funds, which are often used as the default option for DC schemes, total costs were found to be as much as 50% higher than the headline director annual management charge. LCP said this was often because fees charged by external holdings in funds are not disclosed.
In some cases, where trading costs were also taken into consideration, the combined additional costs could be more than the annual management charge itself.
LCP said the results of its research added further weight to industry calls for greater clarity and openness on fees and charges. It also highlighted the results of the Kay Review of equity markets, which highlighted a lack of transparency as a major theme.
Heather Brown, investment partner at LCP and author of the report said: 'Our first report on DC investment fees shows that the overall costs for DC funds can be substantial, which is a particular concern at this time with the imminent introduction of auto-enrolment and the expected growth in the number and size of DC pension arrangements throughout the UK.
'More transparency on fees is needed to help employers, trustees and pension scheme as this could lead to lower costs, which should result in larger pensions for members. In particular, attention needs to be paid to the fees charged for the default investment option as this is where the majority of DC scheme members invest,' she added.