Investors will pay for active managers, says Lipper
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Retail investors in the UK are twice as likely to pay more for active management than they are to track an index, according to Lipper.
Ed Moisson
In order to gauge the public reaction to issue of fund costs, Lipper has compared assets invested in funds of funds with those invested in index tracking funds.
There is currently £56.6 billion invested in the fund of funds sector against £30.5 billion in index trackers, with a similar picture emerging for sales activity last year.
The preference for actively managed funds only serves to highlight the need for greater investor protection when it comes to fees.
Ed Moisson, head of UK and cross-border research at Lipper, says that although Ucits regulations require the full disclosure of costs, the Financial Services Authority (FSA) needs to do more to protect investors when it comes to performance fees.
“The FSA has left itself wide open to the accusation of failing to protect investors when it comes to performance fees… it remains the case that companies will act on fee-related issues when there is a business case to do so,” according to Lipper.
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