The survey of discretionary managers shows they believe trusts are not doing enough to highlight their differences from their open-ended competitors and are failing to make their charging structures simpler.
The report, by consultancy firm Broker Profile, comes just a week after Investment Adviser reported calls for trusts to protect investors from wild fluctuations in their share prices. Industry experts said if trusts wanted to finally secure status as a mainstream rival to mutual funds, they would need to address the issue.
Broker Profile spoke to more than 100 respondents from discretionary and wealth managers, including Rathbone Brothers, Charles Stanley, Quilter Cheviot and Brewin Dolphin.
Of those questioned, 71 per cent believed investment trusts had not done enough to highlight their differences from open-ended funds following the RDR, and 77 per cent said they needed to reduce or simplify their management fees.
More than four out of five respondents went further, saying investment trusts that were too small or generalist should consider closing down, with more than half suggesting they would not invest in trusts with assets under £100m.
Broker Profile said the survey was conducted in response to widespread discussions in the industry about the role of investment trusts in the post-RDR world.
“Investors want to use investment trusts but they have to offer the right things,” Tom Durie, head of investment trusts at Broker Profile said.
“After the RDR there was an expectation of a level playing field and access to all of [the intermediary] market. A lot of people were looking at them for the first time. There was this huge opportunity.”
He said the RDR had been a “Darwinian” process, with trusts that do not offer investors something specific missing out.
“Smaller is not in itself bad but we have to offer something of value,” he said. “You have to judge whether what you are doing is relevant today.”
Mr Durie singled out “sleepy companies that are not doing anything to justify the fee”, although he added that “those who do differentiate will get the support”.
John Newlands, head of investment company research at Brewin Dolphin, agreed trusts had not done enough to raise their profiles.
“The investment trust industry has done a bit to clean up fee structures, but nothing like enough to publicise itself to a potential wider audience,” he said.
He believed the RDR was the “greatest ever opportunity for investment trusts”, but he said at least £100m would need to be spent on general advertising to boost awareness of the sector.
Ian Sayers, director-general at the trade body the Association of Investment Companies, said he “entirely agreed” with the survey.
“If you are a smaller, illiquid fund that has not performed well or done anything different from other bigger, better-performing funds, the RDR will not help you and will accelerate your demise, but that is not a bad thing,” he said.
The director said that while a lot of these were perennial issues surrounding investment trusts, he had noticed liquidity becoming more of an issue, as discretionary wealth managers increased in size and so required larger vehicles to invest in.