Treating Customers Unfairly – the tracker funds with ‘enhanced’ fees

A change in management policy for two investment funds, which allowed retail customers to be over-charged for almost five years, has led to costly enforcement action against Henderson Investment Funds. Lessons should be learned from this failure of systems and controls in relation to the management, oversight and governance of such funds, reports Denis O’Connor.

Denis O’Connoris a fellow of both the Institute of Chartered Accountants in England & Wales and the Chartered Institute of Securities and Investment. He was a member of the British Bankers’ Association Money Laundering Committee from 2003-10 and a member of the Joint Money Laundering Steering Group’s board and editorial panel between 2010 and 2016. He has been a frequent speaker at industry conferences on financial crime issues, both in the United Kingdom and abroad.

The Financial Conduct Authority recently fined Henderson Investment Funds Ltd (HIFL) £1,867,000 for failing to treat fairly more than 4,700 retail investors in two of their funds – the Henderson Japan Enhanced Equity Fund and the Henderson North American Enhanced Equity Fund (the funds). Henderson also paid £1,784,000 in compensation to the investors.