Fixed fees are only in investors’ best interests in a handful of cases, according to research from London’s Cass Business School.

Academics there found that only when third-party managers are very skilled and undertake greater risk in their investments can fixed fees be the right choice for clients.

The bulk of institutional mandates in Europe are remunerated by a fixed percentage of assets managed.

But the Cass research suggested that only in 9% of scenarios was this optimal for clients, and that all these occurred when the manager displayed an Information Ratio of 0.5 or more and tracking error relative to the benchmark of 6% or more.

Conversely, fixed fees are in asset managers’ best interests 86% of the time.

The academics suggest that a symmetric fee structure, whereby managers share losses and gains equally with the client, are most preferable under most scenarios for clients.

Both the size and form of asset management fees have come under attack from pension funds and consumers this year.

Peter Borgdorff, head of the Dutch healthworkers’ scheme, has said there should be financial penalties for underperformance.

This week, the UK’s Financial Services Consumer Panel described hidden costs in fund management fees as a scandal.

Chris Wagstaff, a trustee of the UK Merchant Navy Officers’ Pension Fund, said asset managers who believed they were skilled and added alpha should show the courage of their convictions and offer symmetric fees.