In an Axa Wealth white paper, entitled, Wealth Management – From Recession To Recovery, 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 the customer or the fund manager. It is not that we want to cull the fund management industry, it is that if there is too much choice, people will not choose anything.”
Kellard says Axa will heavily promote and invest in its multi-manager operation to help guide investors in the market.
He says the biggest barrier to investment is financial jargon and the lack of understanding over charging. He says: “We have to hold our hands up as an industry and say we have made it difficult by creating a language barrier that stops people accessing. It is all about making it simpler for people to understand.”
Kellard says another concern is the regulatory imbalance that allows consumers to access debt more easily than certain savings products.
Axa’s paper calls for a review of some aspects of regulation, arguing that the current level of regulation is stifling innovation and says an industry-wide standard definition of risk could help investors better understand and compare funds.
Alan Steel Asset Management consultant Alan Adam says: “There are far too many funds out there and much more consolidation and tidying is needed.
“People, particularly those people not taking advice, want more generalist-based funds rather than, say, a specific grain or industrial fund. It has been led by marketing rather than demand.”