Investors are being misled by the investment management industry and are hit with more than £18 billion in hidden dealing costs each year, says SCM Private.

Research by the wealth management company found that only 19 per cent of investors are aware of what they are being charged when it comes to investing.

Nearly nine out 10 (89 per cent) investors think fund managers should disclose a full breakdown of the fees they charge.

Some 63 per cent also say they would be more likely to invest if the costs were more transparent.

Alan Miller, co-founder and chief investment officer of SCM, says hidden fees, a lack of transparency and the use of convoluted language mean the odds are stacked against consumers to make informed and competitive decisions when it comes to investing.

The company has now launched a campaign – entitled 'True and Fair' – which is calling for a complete overhaul of the industry in a bid to try to tackle these hidden costs.

Miller says: 'We believe that if there was better product description, accuracy and a consistent industry format, investor confidence and trust could be rebuilt, and the savings inertia tackled. As an industry we need to work together to justify our existence.

'Rather than the consumer having to navigate the minefield of industry practices and be forced to play "hide and seek" to find either the costs or their actual investments, the onus should be on the industry to act in an ethically manner and be honest with customers,' he adds.

At Money Observer we have long campaigned for the true costs of investing to be made clear. Read editor Andrew Pitts’ manifesto here.

This was written for our sister website, Moneywise