The days when a fund management company could agree to manage a client’s investments on the basis of a short letter of instruction and a healthy fee based on the value of the portfolio are long gone. The greater sophistication of the market, as well as of fund managers and clients themselves, and the wider availability of different types of investments, has led to many more issues needing to be covered in respect of the basis on which the fund manager manages its client’s investments.
All this has been given greater focus by the legal claim brought last year by Unilever’s pension fund against Merrill Lynch Investment Managers for investment under-performance. Now that the dust has settled, the case has left fund managers worrying about the details of the contracts under which they look after their clients’ assets and the liabilities that may arise under them.
