IN THE BACK
I also hope that more fund managers and direct businesses will offer discretionary managed portfolios direct to us punters for a low cost , rather than distributing individual products through IFAs and investment platforms .
Spoilt for choice With more than 7,000 funds to choose from , it ’ s getting tougher to pick the winners on a consistent basis , and constantly fiddling with your portfolio flies in the face of the best advice – choose well and leave alone . Previously , fund management groups had a “ love-in ” with IFAs , which operated as their sales force . Much of their business depended on ensuring these advisers were pampered and remunerated accordingly . IFAs no longer receive commission on fund sales and instead have to charge directly for their services , just like accountants and solicitors . The typical 0.75 % fee paid by fund managers to advisers each year has mercifully disappeared , but you ’ ll still pay advice and platform-administration fees .
If you ’ re comfortable and confident doing your own research and picking investments , you can save a sack-full of money . Technological advances and the move by asset managers towards developing all-in-one products such as multi-asset and multi-manager funds gives them the opportunity to sell directly to the consumer , where they have more control over their distribution . In the past , fund groups typically tried and failed to market their products this way as they did it on an individual fund basis , rather than by selling packaged solutions . Now the gloves are off , and I believe we will see more groups offering direct solutions at competitive prices , partly in response to Vanguard ’ s audacious low-cost portfolios , but also to shore up their distribution strategies . One of the UK ’ s largest fund managers , abrdn , acquired interactive investor for £ 1.5bn as an acknowledgement that it needs to connect with the end investor and demonstrate it is not wholly dependent on its current distribution network .
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