Jeff Prestridge  

Hail the long-term investor

Jeff Prestridge

Jeff Prestridge

If platform providers do not make immediate progress in tackling these issues, the regulator is prepared to get tough with the introduction of a number of ‘remedies’ it will outline early next year.

Hopefully, the platform market will respond in a positive fashion and give investors a better deal.

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The platform market should look no further than the investment trust industry for evidence of real progress in the best interests of investors.

Rarely a week now goes by without the board of at least one trust announcing a reduction in the fees that the investment manager can take for its services.

The latest is Fidelity Special Values, a trust set up in 1994 to showcase the investment skills of the now retired Anthony Bolton.

From this September, an annual charge of 0.875 per cent will be replaced by a two tiered charging structure, resulting in a 0.85 per cent fee on the first £700m of net assets and 0.75 per cent on any sum above.

Of course it does not constitute monumental change but it is progress for the better – an acknowledgement that investors deserve a fairer slice of the cake.

It would be great if similar tiered pricing were adopted on big £1bn-plus unit trusts and investment funds.

For the life of me I cannot see why it is not possible. Am I wrong? (let me know if so).

If there was one measure I would like to see introduced more than any other, it would be a requirement for all funds to publish an ongoing annual charge expressed not just as a percentage but in pounds and pence.

At the drop of a hat, this would highlight the rich coal many asset managers are still mining from our investments – and through disclosure put pressure on them to reduce the scale of their mining.

Indeed, this principle should be extended to investment platforms with a requirement every year for providers to furnish investors with details of the charges for having their investments on the platform – expressed in both percentage terms and pounds and pence. That means all costs be they fund, platform or adviser levied.

Jeff Prestridge is personal finance editor of the Mail on Sunday