The Kay Review was published last month by Professor John Kay and focused on how the UK equity markets were performing.
Much focus was put on the asset management industry which Prof. Kay said had a lack of trust and a culture of short-termism.
Mr Saunders said: "I do have some issues, most notably the impact of transaction-driven intermediaries. The report rightly draws attention to the number of intermediaries in the investment chain, all of whom take a slice of the investor's return. But the incentives for intermediaries which are rewarded transaction-by-transaction are fundamentally different from those which operate on an agency basis."

He went on to describe the differences between advisers who were giving advice for commission and those who were giving advice on a retainer, explaining those who gave advice on a retainer were more likely to give better advice in order to sustain the relationship with the client.
He said: "Investment banks advising companies have an incentive to maximise corporate transactions because they are generally only paid if the deals are completed. But asset managers operate on a different basis: they are paid a percentage of the value of the assets they manage. This firmly aligns their interests with those of their clients.
"So I find it puzzling that the report focuses on the asset management industry.
"It is surely better to address the root causes of the problem rather than relying on post hoc policing by investors."