In the white paper, Wealth Management – from recession to recovery, published today Axa Wealth chief executive Mike Kellard says too much choice is hindering rather than helping investors and fund managers.
He says: “Investment managers in the UK are very good at launching new funds when they have perfectly good existing ones doing almost exactly the same thing. We need to rationalise the amount of funds on offer – too much choice is not necessarily a good thing for either the customer or the fund manager.”
The paper says that increased use of multi-manager and guided architecture will help reduce the “bewildering choice” available in the market.
It says the biggest barrier to investment is financial jargon and lack of understanding surrounding charging and says product solutions must address consumer inertia and fear of loss.
The paper also calls for a review of some aspects of regulation, arguing that the current amount is stifling innovation.
It says: “The upside is being lost in the rush to limit the downside of investments.”
The paper also urges the investment industry to battle against any government changes that could water down the impact of the FSA’s retail distribution review.
It calls for action on an industry-wide standard definition of risk which is being driven by the Association of British Insurers.
It says: “A standard definition of risk would help restore investor’s faith in the industry and allow them to easily understand and compare funds.”
The paper also warns that RDR changes pose risks to middle market investors.
It says: “Axa Wealth is concerned that the industry has lost sight of the middle market and how access to advice can be widened to ensure professional support is available to as many consumers as possible.”