IFAs and clients must 'demand' transparency
Speaking at the Personal Finance Society Conference held in London last week, Mr Norman said that most people know the cost of running a fridge or a car, but not the true cost of running an investment fund.
He told about 650 delegates that advisers should demand transparency.
Mr Norman said: "The annual management of a fund is for example 1.5 per cent. But as the fund gets bigger the costs of the fund also increase, so those costs are hidden in the back in the prospectus, which are the turnover rate and the cost of trading the portfolio.
"The FSA is not looking at this issue but is turning its attention to trail.
"If you are an IFA you should investigate a distribution-influenced fund."
Mr Norman was speaking on a debate about the future of the financial services industry.
The debate including Chris Cummings, director general of the Association of IFAs, who talked about his sector; Peter Jolly, head of distribution policy for the Association of British Insurers who discussed life and pensions products and the insurance industry, and Paul Bradshaw, chairman of wrap Nucleus who talked about the bancassurance model.
Mr Jolly warned that the insurance industry has started to fragment into three areas.
He said: "It is very difficult to talk about a traditional life insurance industry as it has started to fragment. You have risk management life companies, asset management life companies that try to support advisers, and consolidator life companies.
"For those who want to distribute products, the relationship they have with advisers is key going forward."
Mr Bradshaw said that insurance companies pool risk.
He said: "If you are an insurance company and you get out of the risk business you should get out of the insurance business."
Mr Cummings said the IFA sector should be more united as it was unity got the banking sector through the credit crunch.
Justin Urquhart Stewart, director for Seven Investment Management, chaired the two-day conference.
The conference also included speeches by Paul Lothian, president of the PFS and Fay Goddard, chief executive of the PFS.
Nick Bamford, chief executive of Surrey-based IFA Informed Choice discussed the changes to the advice model and how advisers could build value to their businesses.