City thinktank CSFI has been agonizing over whether to bite one of the hands that feeds it. Should it publish a paper by FSA researcher Kevin James which claims that - surprise, surprise - the gullible British public are being ripped off by their fund managers?
The problem is that one of the friends of the charitably-endowed Centre for the Study of Financial Innovation is the Association of Unit Trusts & Investment Funds (Autif).
In his detailed and quantitative paper, James argues that the discrepancy in management fees typically charged on discretionary funds and those charged by index fund managers is impossible to justify in terms of long-term performance or value added. Accordingly he concludes with the accusation that the industry is overcharging its discretionary clients by around £25 billion ($42 billion) a year.
The CSFI - understandably cautious - showed the paper to a leading academic, who adjusted the maths a little but agrees with the conclusion. It also consulted Autif, unleashing a furious 17-page refutation of practically every word.
"We'll publish in early January," says CSFI director Andrew Hilton, "unless we find a dreadful mistake in Kevin's maths, or unless we get cold feet."