Granite guidance

Black Friday Fund Management Sale?

We all love a bargain, hence the popularity of Black Friday in the UK which has now extended to almost every industry. I say almost as if you invest in an actively managed UK investment fund you are unlikely to find any Black Friday deals or discounts on offer.

The fund management industry in the UK is huge and manages over £6.9 trillion of assets. Charges for actively managed funds, however, remain stubbornly high with average costs estimated to be 0.9% per annum. These generally do no change whether the fund is £1million in size or £10 billion in size. Economies of scale must exist, but these are not being passed on to customers and explains why fund managers profit margins remain eye wateringly high.

Do higher charges lead to higher returns? The answer is an overwhelming no.

Standard & Poors produces regular scorecards showing that active fund managers consistently underperform against their benchmarks over the longer term.

Whilst some active fund managers do outperform the chances of predicting this in advance is in my opinion virtually nil. As Jack Bogle of Vanguard famously said, "rather than trying to find a needle in the haystack buy the haystack."

There are a band of Financial Planners who offer evidence based investment advice using low cost asset class funds to drive the investment engine. Granite Financial Planning are proud to be one of them.

As Black Friday deals are unlikely to be forthcoming if you would like to see if we can reduce your investment costs please contact us on 01330 826544.

 

 

 

Granite Financial Planning Ltd is Authorised and Regulated by the Financial Conduct Authority | FCA No. 734432.
Registered in Scotland | Registered no. SC522812 | Registered address: Banchory Business Centre, Burn O’Bennie Road, Banchory, Aberdeenshire AB31 5ZU | Telephone: 01330 826544 | Email This email address is being protected from spambots. You need JavaScript enabled to view it.

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The general financial planning guidance provided in this website is based on our understanding of current law and HM Revenue & Customs practice, which are subject to change in the future. Whilst every effort is made to ensure the content of this website is correct, it does not constitute personal financial advice and Granite Financial Planning Ltd cannot accept any responsibility for it. There is a risk that investment returns may not achieve the desired result. Investments can go down as well as up. The Financial Ombudsman Service (FOS) is an agency for arbitrating on unresolved complaints between regulated firms and their clients. Full details of the FOS can be found on its website at www.financial-ombudsman.org.uk. Cookies are used on this website to record visitor numbers for analytics purposes.