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&#39Fund merry-go-round is damaging the industry&#39

Edinburgh Fund Managers managing director Harry Morgan says the constant merry-go-round of fund managers is bringing the industry into disrepute.

Speaking at the Money Marketing IFA UK conference in London last week, Morgan said the endless procession of star fund managers moving from one company to another is harming clients and leaving them confused about what to do with their investments.

His comments come as Lazard UK smaller companies manager Richard Smith has left to join Invesco Perpetual&#39s UK team.

Morgan said although many star managers deliver decent returns, there is a risk of investors becoming too dependent on them as there is no guarantee they will manage a fund for long.

His comments are welcomed by IFAs, who say clients are becoming angry about being left in the lurch by managers chasing lucrative deals.

Morgan says: “When managers go on gardening leave, what are their clients supposed to do? There is a risk of becoming too dependent on star names and this manager merry-go-round is bringing the industry into disrepute.”

Hargreaves Lansdown head of research Mark Dampier says: “There is a lot of greed involved. It is more like a City culture. Investors do not want to have to monitor their situation constantly. It is very unhelpful to the industry.”

Comment, p37

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