Milford last year reached a $1.5 million settlement of a market manipulation probe related to former portfolio manager Mark Warminger, who is awaiting a hearing date.
The fund manager introduced a new trading system and beefed up its processes, which it accepted lacked adequate oversight at the time of the trades following a period of rapid growth.
Marsden said Milford's expansion has been organic with KiwiSaver the "growth product for pretty much the industry at the moment", and the fund manager now has a staff of 50 and more than $3.5 billion under management.
Milford Funds' fees fell 14 per cent in the 2016 year to $38.5 million due to the fund manager reaping a smaller performance bonus for exceeding its benchmark. Base management fees were up 22 per cent to $29.6 million, while the performance component more than halved to $8.9 million.
"The funds still performed, they got a performance fee generated so that means our clients continued to do well," Marsden said. "2015 was obviously an exceptional year for everybody."
The main focus recently has been getting through the FMC transition and now we'll turn our attention to other things like products.
Fund management fees are capped at between 0.65 per cent and 1.35 per cent of funds under management, while performance fees range from 10 per cent to 15 per cent of any gains above a fund's investment target.
Milford's diversified income fund generated a return after fees and before tax of 9.6 per cent in the year ended March 31 compared to 17 per cent in 2015, while the active growth fund, managed by executive director Brian Gaynor, posted a return of 8.5 per cent in 2016, down from 12 per cent a year earlier.
Milford Funds paid a smaller dividend in the year of $7.2 million compared to $12 million in 2015, though the payment was still up from 2014.
Marsden said now the regulatory projects have been completed Milford will start looking at its product mix and see what it can do to grow the business.
"The main focus recently has been getting through the FMC transition and now we'll turn our attention to other things like products," he said.
Marsden is acting as chief executive until Troy Swann takes over the reins at the end of October, replacing Anthony Quirk who retired as an executive in June. Swann has been the general manager of boutiques and joint ventures at NAB Asset Management.