Dirty fees meaning

Dirty fees describes fund or mandate charges where, beyond the headline management fee, additional costs are layered in or bundled without clear, itemised disclosure. Typical add‑ons include custody and depositary fees, administration and platform charges, foreign exchange spreads, overseas transaction charges, brokerage and settlement costs, data and research, and other “fund expenses”. This is a descriptive market term, not defined in legislation or case law. Its legal relevance is transparency and allocation of costs. In the UK (England & Wales, Scotland and Northern Ireland), FCA rules (including COBS costs and charges, inducements, best interests and the Consumer Duty) require clear ex‑ante and ex‑post disclosure and fair presentation of all charges. In Ireland, equivalent obligations arise under MiFID II, UCITS/AIFMD and Central Bank of Ireland requirements. Usage and concerns are broadly consistent across these jurisdictions. Practically, lawyers should scrutinise investment management agreements, fund limited partnership agreements, prospectuses and side letters to define what the management fee covers versus pass‑through expenses; guard against double‑charging, mark‑ups and vague “other expenses”; and consider “all‑in” fees, caps, exclusions and MFN protections. For fiduciaries (e.g. trustees), diligence on overseas transaction surcharges and custody costs is particularly important.