Advisers failing investors on fund costs - Defaqto

Laura Miller
clock

Three quarters of advisers are using the wrong measures to compare fund costs, giving clients an inaccurate picture of the charges eating into their returns, according to research by Defaqto.

Fund groups shared the blame, it said, for failing to be clear about all the fees they charge investors. As a result, advisers are underestimating the all inclusive total cost of investing which in reality can be up to 3% per year, even for clients with big portfolios that would usually benefit from lower fees, it said. The research again raised serious questions about what is good value for clients, less than four months after a damning report by the influential Financial Services Consumer Panel (FSCP) that called on the regulator to implement "radical, structural reform" of how fund...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Investment

Why China's journey to net zero demands investors' attention

Why China's journey to net zero demands investors' attention

China's journey towards net zero could yet prove more rapid than expected

Gabriel Sacks
clock 07 May 2025 • 4 min read
Morningstar CEO: Advisers and industry need 'shared language' around risk

Morningstar CEO: Advisers and industry need 'shared language' around risk

Kapoor points to UK regulation becoming more ‘goals focused’

Sahar Nazir
clock 07 May 2025 • 2 min read
PA360: 'Diversified approach has room for both active and passive' - David Coombs

PA360: 'Diversified approach has room for both active and passive' - David Coombs

‘Volatility is your friend if you are a long-term investor’

Jenna Brown
clock 01 May 2025 • 2 min read