View more on these topics

Public believes you pay for quality

The majority of people think that an expensive fund will outperform a

cheap fund, according to NOP Research.

The survey of 966 people commissioned by Norwich Union also shows that

more than half of
people expect a more expensive Isa fund to perform

better than a lower-cost fund. It says 53 per cent believe it is a case of

the more you pay the better the quality.

The research also rev^_eals that only 10 per cent of the population know

that an actively managed Isa costs almost 7 per cent of the investment in

the first year.

Last November, a Money Marketing survey questioned 94 companies offering

Isa funds in the UK smaller companies and European (excluding UK) sectors.

Assuming growth of 7 per cent a year, the fund managers calculated what a

3,000 investment would be worth after char^_ges had been deducted.

For example, investors with Legal & General European Index would be

sitting on a fund of 5,440 after 10 years – the lowest-charging fund in

this sector.

But investors with AIB Govett European growth would not fare as well. Over

the same period their investment would only be worth 4,581 – a difference

of 859, almost 16 per cent.

Norwich Union director of sales & marketing Mark Skinner says: “Why are

investors shackled to these misconceptions? Some companies only see the Cat

standard as a potential threat to profit margins.”

Recommended

TMO goes short on redemptions

The Mortgage Operation is offering a three-year mortgage fixed at 6.59 percent, with the redemption period extending a year after the fix ends.Clients can cut the period of the redemption penalty to the fixed per^_iodat an additional 0.1 per cent on the rate.TMO says the loan is in response to public demand for short redemptionlock-ins […]

Property subsidence

Remortages are und^_erpinning new business and will become increas^_inglyimportant as the online challenge grows. The value of independent advice isstill recognised but IFAs will haveto work harder to maintain demand.Online competition threatens to cut profit margins further. The growingemph^_asis on remortages is combining with a greater preference fornon-branch distribution channels, according to research analyst Mintel.“This […]

Independent View

Quality and differentiation are now becoming buzz words in the IFA sector.How can firms of all shapes and sizes create a quality strategy for thefuture which will give them a competitive edge?There are only ever two ways of gaining a sustainable, competitiveadvantage. They are doing it cheaper or doing it better. The problem withdoing it […]

Institute aims to bridge the CeMap learning gap

A support package from the Institute of Financial Ser^_vices aims to helpadvi-sers pass the CeMap bridge paper for mortgage intermediaries.The package includes revision notes, multiple-choice tests and model answers.The CeMap bridge paper is for advisers who already have the Certificatefor Fin^_ancial Advisers or FPC and is recognised by the MCCB as one of theaccredited routes […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment