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Advisers rated better than fund managers by investors

Broken-Heart-Relationship-Sad-Feelings-Hurt-700x450.jpgUK investors view financial advisers more positively than asset managers as fund houses come under increased scrutiny over fees and transparency.

UK investors also view asset managers more negatively than their global peers.

A Natixis Global Asset Management survey questioned individuals with investible assets over $100,000 internationally, including 750 respondents from the UK.

A breakdown of results by country reveals UK investors demand particularly high investment returns, expecting an average 9.3 per cent annual return above inflation.

But they were substantially more negative on the industry managing their money than the global average, voicing scepticism about whether asset managers are upfront about performance, put client interests first and provide value for money.

Only 34 per cent of UK respondents agreed asset managers are upfront about the limitations of their products compared to 54 per cent of global respondents. The 20 percentage point difference was the largest gap between the UK and the global average, but other issues also delivered double-digit discrepancies.

For example, less than half (46 per cent) of UK investors thought asset managers provide value for money compared to 58 per cent of global respondents. When it comes to fund performance, only 43 per cent of UK investors believe asset managers are upfront, but 59 per cent of global respondents agree that they are.

The Natixis survey also revealed wide gaps on whether asset managers put client interests first, which barely a third of UK investors agreed with (35 per cent) compared to the majority of global investors (52 per cent).

Tilney Group managing director Jason Tilney says the findings are unsurprising given the scrutiny the UK industry faces from financial press and the regulator, but that some of the scepticism is justified.

“Since RDR there has been a heavy focus on costs in personal finance press and also significant growth in passives, which are sometimes promoted in a dogmatic and aggressive way that positions the active fund management industry very negatively.”

Hollands adds that the FCA’s asset management study was “scathing”, in part about lack of competition in costs.

The market study, released over the summer, highlighted weak price competition in various areas of the investment industry, including “evidence of sustained high profits” of asset managers and a lack of clarity around funds’ objectives.

FCA chief executive Andrew Bailey this week said that the all-in fee will make the City more competitive.

Advisers viewed more favourably

In contrast, the Natixis survey found financial advisers were viewed more favourably in the UK, where 95 per cent list their own adviser as their most trusted source when it comes to making investment decisions, compared to 88 per cent globally.

UK investors were more than twice as likely to say their advisers had no room for improvement with 64 per cent agreeing with the statement compared to 29 per cent globally.

Where there was room for improvement, investors said they wanted more explanation about fees, investments that reflect personal values and help discussing financial planning with their families.

The total survey questioned investors from 26 countries across Asia, Europe, the Americas and the Middle East.

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  1. “UK investors demand 9.5% annual returns above inflation ”

    If true is it any wonder so many people are scammed.

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