In our latest wave of consumer research, we find that just over a third of investors are clear about how much they pay for their fund investments. If anything, this self-reported perception may be too high. Fund fees are probably still too complicated for most investors to really understand, so perhaps strong markets have added an element of overconfidence here.
35% of British investors claim to know how much they pay for the funds they hold.
Platforum Consumer Insights will be published next month
This week, I logged into one of my investment platform accounts to find out how much I have been paying for my funds. I had no luck. Couldn’t find the amount paid as the account fee either. MiFID II will address this and the challenge is huge for both distributors and asset managers. However, I received a letter from the platform only this week to inform me that it will be disclosing costs and charges as cash amounts and as percentages from 1st January 2018.
Beyond MiFID II and the FCA’s work to ‘fix’ the asset management sector, ESMA has recently published a report about the impact that fund fees have on investor returns. The ‘good’ news is that the relative return reduction is lower in the UK than in the rest of Europe thanks to RDR. But it’s still not good enough. Costs and charges need to be crystal clear for investors and ultimately, that will enable them to make better choices.