Investors' focus shifting from performance to costs - Nucleus

David Ferguson, chief executive of the IFA-owned and controlled wrap proposition, said lacklustre performance in the stock market had meant investors' attention had increasingly been focused on costs rather than performance.

Mr Ferguson said Vanguard's entry to the UK passive fund market in particular, along with GLG's low annual management charge and performance fee solution in the active fund space - had set the standard for other asset managers in the UK in terms of costs, transparency and accountability.

This would force others to follow suit, adapting their charging structures to be more closely aligned with the interests of the end investor, he said.

Mr Ferguson said: "It is well known and reported that costs play a huge part in the overall performance of a fund and, while asset managers are prepared to offer all sorts of discounts behind closed doors, in public they have tended to strongly defend their traditional, and high, charging structure.

"Vanguard and GLG have reignited the debate around funds and the fees they charge at a time when costs and transparency are high up the industry agenda - their actions could help force the asset management industry to finally bring itself more in line with the interests of those whose money it so actively covets."

Keith Jarman, director of Hampshire-based Hughes Carne IFA, said: "Consumers are often influenced by cost while advisers are influence by net results. When I look at a wrap platform I look to see how much it costs and the performance and how it would benefit my client.

"Cost is an issue but you have to look beyond that because focusing solely on cost will do you no favours in the long term."