ETFs: 'Avoid backing the right horse, but the wrong jockey'

In the run up to RDR, advisers are faced with a myriad of decisions for their clients. An age-old, but ongoing, debate in the investment world is whether to use actively managed or passive funds in investment portfolios. Those in favour of actively managed funds believe the manager at the helm – making active allocation decisions in order to beat the benchmark – justifies the higher charges. However, advisers on the passive side of the fence argue the strategy is a cheaper and quicker way to access the stock market and carries less risk. Already well developed in the US, ETF provid...