F or how long can you levy charges on individuals, without giving them a say in how it is done? In an inadvertent irony, I found myself asking this question at the Carlton Club – an institution founded upon political opposition to electoral reform in 1832 and one that, historically, would neither have embraced, nor enfranchised, the likes of me. Fortunately, its latter-day members make an exception for journalists attending the F&C Investments Opinion Formers’ dinner. As an opinion divider – on the issue of charges levied on private investors (FT Money October 31 and November 7) – I welcomed the chance to put readers’ views to F&C’s fund managers, and form some opinions of my own.

Since I began writing on fund charges – first in our “DIY Financial Planning” guides and then in the “Future of Investing” series – investor dissatisfaction with the way costs are disclosed has become clear. It is only in recent weeks, though, that the discussion has taken in the views of independent financial advisers, brokers and investment managers. But, as with all debates, the lobbying by vested interests must give way to a policy – and a vote.

A majority of FT readers now appear to support disclosure of “hidden” fund charges – those currently excluded from the total expense ratio (TER). A consultant to the fund management industry wrote this week: “Only when all the components of a retail fund that generate profits to the fund manager are made transparent, will the true cost of investing become clear.” One fund manager was even honest enough to admit: “It was a bit of a surprise to us to learn that our TER did not include transactions.” A former chief executive of a life and pensions company drew up the battle lines: “You are definitely doing your readers and ultimately the industry a favour in exposing TER make-up, although I guess the former currently appreciate it more than the latter.” He was right.

Block voters, and some financial advisers, have tried to shift the focus on to investment performance. Last week, the chief executive of the Investment Management Association (IMA) argued that, because the average UK tracker fund underperformed the index by less than the average TER, there were no hidden charges.

But others accused him of filibustering. Alan Miller, the fund manager leading calls for TER reform, suggested the IMA “is either unaware of basic facts or choosing to ignore them – the prime reason that the tracker funds have underperformed by less than their TER is that they earn income from lending out their stocks.” To the fund consultant, the performance argument was “a disingenuous piece of self-serving justification”. He pointed out that a number of fund credits are not included in the TER: stock lending, portfolio trading profits and rebates on underlying investments. “Some of these are only disclosed in the investment management agreement . . .  something a retail investor will never get to see.”

An anonymous correspondent criticised my “strong support” for ETFs because of their undisclosed income. “This hidden risk-taking activity is even more dangerous than other ‘hidden’ expenses.” He also criticised high performance fees charged by portfolio managers using ETFs. I agree with much of this.

However, that’s not the point. My argument is not about tracker fund performance versus active funds, or percentage fees versus performance fees. It is simply about knowing upfront what will be deducted from your investment.

Here is my manifesto for reform.

● 1. Calculate the past year’s portfolio turnover rate, the resultant annual transaction costs and the stamp duty incurred (this is already done for annual reports – but how many investors are shown annual reports before they invest?).

● 2. Calculate the average spread between buying and selling prices on underlying fund holdings, as a percentage additional charge (this is currently not shown anywhere).

● 3. Calculate the impact of front-end charges and exit charges (these are currently excluded from the TER).

● 4. Add on the funds’ additional sources of income from lending out stocks, rebates and other trading profits.

● 5. Put these figures into a mini “Costs P&L”, which has as its bottom line a “total performance drag” percentage figure – and publish this in all fund fact sheets, prospectuses and key features documents .

● 6. Where there are additional performance fees, calculate an additional “reduction in return” percentage for a range of scenarios: negative return, zero, 5 per cent, 10 per cent etc.

At the Carlton Club, one F&C fund manager summed it up perfectly: “It’s all about telling investors what kind of headwind they have to overcome.”

Sitting in an institution that eventually bowed to the winds of change – and brought down a few cosy coalitions – it gave me some hope.

To cast your vote on these reforms, please e-mail me. I will present the responses to the IMA in a few weeks’ time.

matthew.vincent@ft.com