The FCA said Henderson failed to treat fairly more than 4,500 retail investors while institutional investors were told about the change.

The watchdog says the problems affected investors in the Henderson Japan Enhanced Equity Fund and the Henderson North American Enhanced Equity Fund.

The FCA said those affected included 4,713 direct retail investors and 75 intermediary companies. The failings were a breach of Principle 6 of the FCA’s Principles for Business.

In November 2011, HIFL’s appointed investment manager Henderson Global Investors Limited decided to reduce the level of active management of its Japan and North American Funds.

The FCA said: “The subsequent treatment of retail investors in these funds was substantially different from its treatment of the institutional investors in the same funds.”

HGIL informed nearly all of the institutional investors who were affected by this change and offered to manage the two funds for those investors without charge.

In contrast, it did not communicate the change in investment strategy to retail customers. 

The regulator said this meant that for nearly five years Henderson Global Investors  charged these investors the same level of fees as it had before the decision was made but did not provide the same level of active management.

Mark Steward, executive director of enforcement and market oversight at the FCA, said: “The FCA requires firms to treat all its customers fairly, not just some customers. 

“In this case, retail investors paid fees for active investment management they did not receive. 

“For retail clients, the Japan and North American Funds were in effect operating as ‘closet trackers’ as the fees charged to them were inappropriate given the diminished level of active management. The matter is aggravated by the length of time HIFL took to identify the harm being caused to the retail investors and to fix it.”