Bed-time reading

The report's confirmation of the increased popularity of both funds of funds, total assets now of £34bn and ethical products, assets of £5.9bn, is also pleasing. Funds of funds in particular have come a long way since the 1980s when most offerings were of a fettered nature.

Innovation in this sector has led to better product offerings for investors. Where the IMA's annual report gets particularly juicy is in looking at the way business is done. According to the IMA's survey, intermediaries accounted for 85 per cent of the industry's sales in 2007, compared with only 6 per cent of business done direct with the private investor.

Is this good or bad? Well, the IMA does not express an opinion, instead leaving it to the survey's contributors to provide their own comments. Diplomatically, it gives a range of opinions. One fund management house - anonymous of course - says the "people that run investments very well are rarely the people who run distribution very well and vice versa". It concludes: "People who become too distribution minded lose their investment edge." Such comment must be music to the ears of leading fund supermarkets such as Hargreaves Lansdown.

Opposing this, another provider laments: "The industry on the manufacturing side failed to find a way to distribute direct to the public and failed to find a way to do their administration properly. We have lost a bit of the value chain and it is our own fault."

My own view is that it is lamentable that the industry has failed to crack the direct market. But I do accept that in channelling most business through intermediaries, the investment industry has had to become more performance oriented for fear of seeing swathes of money moved out of their funds.

Turning to the future, the IMA survey asks contributors for their take. Absolute return funds, it seems, will become increasingly popular provided, and I think this is crucial, the industry designs products that actually deliver positive returns. As one survey contributor pointedly said: "If you want to call it absolute return, then you need to be able to be clear that a consistently positive outcome is a reasonable expectation from your investment process. That is one hurdle I do not think everybody has got their heads around."

All in all, the IMA survey provides an upbeat assessment of the UK's retail fund management industry. Yes, it moans a little about the UK's unfriendly tax environment and regulatory creep but given the awful economic backdrop, the UK fund management industry continues to do remarkably well. It is an industry we should all be proud of, including our beloved Richard and Judy.

Jeff Prestridge is personal finance editor of Financial Mail on Sunday