For example, some fund managers use soft dollar gifts to help smooth relationships with brokers, while swap structures in some hedge fund-of-fund allocations ignore underlying manager costs.

Given the ability of managers to cut fees while being exposed to similar fee savings. True costs, trustees could potentially “You want obsession about the right things, not the wrong things,” Elvish concludes.

This article appears in the upcoming November issue of Investment & Technology magazine. If you would like to receive the magazine click the button below to subscribe