Investors are suing BlackRock for charging what they say are unjustifiable fees on its mutual funds, reports the Financial Times.
The company is facing four suits in the U.S. that allege the company is breaking securities laws by overcharging investors, FT reports. The main complaint is that BlackRock adds its own management fee on top of those charged by fund sub-advisors.
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One suit alleges that Black Rock pays the sub-advisor of its equity dividend fund 74% of the management fees it collects, and retains the rest, though BlackRock does “little, if any, work” itself on the fund, reports FT.
The complainants say that similar funds managed by sub-advisors who also work for BlackRock have lower fees.
Other fund managers, including JPMorgan and Russell Investments, are facing similar suits.
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