Pension schemes are paying their active investment managers up to 70% more than six years ago even though average fee rates have dropped for most asset classes, according to consultancy LCP.

For an active global equity mandate that had matched the return of the global equity index, an investor could be paying up to 70% more in fees than they had been in 2011, LCP reported in its latest Investment Management Fee Survey.

It said this highlighted how active managers were rewarded for simply retaining assets, and not necessarily making above-benchmark returns.

The report’s author, Matt Gibson, partner and head of investment research at LCP, said: “Investment managers have done very well out of increases in assets under management over recent years.”

But these increases had mostly been driven by general rises in equity and bond markets, he added.

“Whilst we welcome the reduction in fee rates in many asset classes, overall, investment managers are charging much more but don’t seem to be doing more,” Gibson said.

The findings of the report – which examined total costs for a hypothetical £50m (€59m) investment across the most popular asset classes used by LCP clients – showed it was important for schemes to monitor their investment managers regularly and put negotiating pressure on them to reduce fees, Gibson said.

Of the asset classes covered by the report, the highest average costs were for UK property at £590,000 (roughly 1.18%), while passive UK equity was the cheapest at £38,000 (roughly 0.08%).

Certain hedge fund strategies had even higher charges, the consultancy said.

The survey separately found benefits for defined contribution schemes using platforms instead of accessing funds directly. LCP said a £10m allocation to a passive global equity fund would be £5,500 cheaper via a platform.

LCP’s survey also reported a lack of consistent and transparent reporting on transaction costs. This echoed recent work from the Financial Conduct Authority, the UK regulator, which criticised fund managers for weak pricing and a lack of transparency. The asset management trade body, the Investment Association, is currently consulting on a new fee disclosure code.

While some managers only gave data on explicit trading costs, such as broker’s commission and stamp duty, others tried to quantify implicit costs such as dealing spreads and the impact of the fund’s transactions on the market price of a security, the consultancy said.

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