But for Jackie Beard, director of manager research services for Morningstar, the Mifid II changes do not offer so much a comment on active versus passive management, but does focus on whether the client is getting what they are paying for.
She explains: “If you are paying for an active manager and you are getting the alpha you expect, then you are getting value for money. Cost disclosure will not push everyone into passive, but it will show clearly the quality of the fund.”
According to Ms Beard: “We have always viewed price as a key component in a fund’s success or failure.
“The increase in fee transparency, brought about by Mifid II, is welcome, in our view.”
Barry Neilson, business development director for Nucleus, says with the onus on the adviser to provide clients with a statement of total costs and charges, this might mean that client agreements and product illustrations will have to change.
While this might be a lot of administration, he adds: “This could be good in exposing the costs of vertically integrated firms, it is arguable whether the new rules will boost transparency, as there is no standardised format for disclosure, and it is not clear what the impact will be for initial advice.”
This is one of the reasons why Sarah Lyons, head of marketing at Ascentric, says full disclosure of fees and charges is going to be a big change.
She comments some platforms are helping advisers with pre-sales illustration tools, which will now include all costs and charges, as well as the aggregate figure.
Ms Lyons adds: “Advisers with access to this tool will be able to produce Mifid-II compliant pre-sales illustrations.”
Regardless of the way in which providers and platforms are giving information on fees to distributors and clients, the improved transparency will be helpful to advisers.
David Ogden, compliance manager for Seven Investment Management, says periodic statements provided to clients on a quarterly basis as required will incorporate all these costs and charges, but more detailed information will be available on request "from the beginning of 2019, which we believe is the industry standard approach", he adds.
It will certainly bring upfront, clear and easier-to-digest information to the adviser and investor's view.
As Hugues Gillibert, chief executive of Fitz Partners, states: “As Mifid II covers both investment products and investment services costs, it will bring transparency or at least more completeness, from an investor’s perspective.
“The measure of fund acquisition costs or investment services is definitely an improvement.”