IFAs rely too heavily on past performance when recommending investment products to clients, according to Ron Sandler.
But his claim has been rejected by the industry and IFAs who say investment performance is too important to ignore when choosing a fund.
In his consultation paper published this week, Sandler questions the importance of past performance in determining advisers' recommendations and what impact it has on product providers' investment strategies.
But Autif says past performance is an important tool for IFAs and it has yet to see any evidence which points to IFAs relying too heavily on it.
Director of communications Anne McMeehan says: “I suspect there are factors other than past performance and commission at work. I think it would be constructive for there to be empirical evidence which genuinely demonstrates the motivation when making inv-estment decisions.”
IFA Baronworth Investment Services director Colin Jackson says: “I think past performance is important. You do need to know how a fund has performed in the past before you recommend it to a client.”
IFA Riach Independent Financial Advisers proprietor Bob Riach says: “I totally disagree with it. You have got to take past performance into account.”