[Weekly Wrap] The great debate on fees

Last week's story about a Harbour Asset Management survey of performance fees for equity funds drew plenty of response, including from Pathfinder's Paul Brownsey, who questioned why fund managers need performance fees at all.

According to Brownsey, performance fees pay fund managers for doing what they are supposed to do anyway - try to get the best returns for their clients and outperform their competitors.  He said he wouldn't mind performance fees if fund managers paid investors when their funds underperformed.

Tower Investments chief executive Sam Stubbs also weighed in on the issue, saying fund managers should be prepared to accept lower income in bad years if they want to cash in during the good years.  Charging a performance fee to keep the headline base management fee low is wrong, he said.

Stubbs also had a message for the media, which had been "mischievous" in its reporting on KiwiSaver fees, which he said are generally very low and a lot lower than for equivalent funds in Australia.