Half of investors are unsure how much they are being charged in fund management fees, according to research by a robo-adviser.
Half of all investors quizzed in an online survey for Netwealth confessed they are not sure about all the fees they are being charged by the company or companies managing tehir money.
According to the analysis, carried out by YouGov, 37 per cent of those surveyed only knew ‘most’ or ‘some’ of the fees and charges they are paying for wealth management services, while 13 per cent are unclear about any of the fees and charges they are paying.
The research was undertaken over four days in May and quizzed 1,014 adults, of which 798 had £50,000 or more in investable assets, and were defined as an ‘investor’.
However the data suggested fees are a high priority for investors, with 84 per cent of investors agreeing fees matter to them and they do not like to overpay.
Almost three quarters - 72 per cent - of those quizzed said ‘transparency around how fees are charged’ is now the most important factor when choosing a wealth manager, followed by personal trust for 67 per cent and good investment performance, which was important for 60 per cent.
Charlotte Ransom, chief executive of Netwealth, said given advances in technology, there is no reason why investors should not be able to access their portfolios in order to see how much they are paying for wealth management services and how their investments are performing.
“Our research indicates that traditional wealth managers are taking advantage of their clients’ trust.
"They make it extremely difficult for clients to see how their portfolios are performing and to understand fully both the level and the impact of fees that can have such huge negative consequences on their long-term savings.”
Other important findings from the research revealed that only 32 per cent of investors surveyed feel they do not need financial advice.
Over half - 56 per cent - said the top benefit of technology is that they have hassle-free access to information about their investments. This enables them to see how their investments are performing at any time of the day and how much they are paying in fees.
Interestingly, 31 per cent said they are happy with their current provider even though they charge them more than they would expect.
Kevin Steinlechner, chartered financial planner at London-based Radcliffe & Newlands, said: “If you ask a client within a week of the fees having been explained to them, there’s a much higher chance of their knowing what they are being charged.
"If you ask them 9 months later, I suspect most will at best have a rough idea.
"Secondly, if they only had £50,000, they are unlikely to have a personal relationship with a wealth manager.
"It’s quite possible that few, if any of the people interviewed, were clients of a wealth manager.”