Fisher Funds has been under fire this week for charging high fees on some of the legacy funds it acquired as part of its Tower funds management buy-up.
Independent research firm MoneyHub has accused Fisher of "ripping off" customers by charging high management fees.
The 14 funds which have $289 million invested from around 20,000 people charge between 1.5 per cent and 6.83 per cent for management.
They have been closed to new investment since 2005 and progressively members have been moved out.
Fishers' chief executive Bruce McLachlan says clients aren't being "ripped off" because they are getting what they signed up for.
But admits in today's context the fees are "far from competitive".
He also says they are not the only ones with these type of legacy funds around the market.
The situation raises a number of questions. Why keep running funds if they are no longer competitive with the market and not open to new money?
It would be easy to accuse Fisher Funds of squeezing these investors until they either die or wake up and move elsewhere.
But McLachlan insists it is not that simple to shut down funds of these sort.
"This is not like a bank account though and is materially more complex. When you consider long term personal superannuation schemes there are governing documents/deeds that envisage a 50 year + contract between organisation, supervisor and client. If a wholesale change is made it has to be right for all clients."
Some of the funds have been sold with tied insurance arrangements which does complicate matters.
McLachlan also makes it clear that most of the investors have advisers. That begs the question of why those advisers have not told their clients to move to something more competitive?
But perhaps the biggest issue is that it is very difficult for consumers to compare the charges on different funds like this.
Regulators have taken steps to make it easier for KiwiSaver investors to compare fees on funds but much more needs to be done to help investors in the non-KiwiSaver space.
This should be a wake-up call for all.