A research conducted by Italian digital wealth manager MoneyFarm shows that 81% of private investors think investment advice is biased towards generating fees for the industry rather than delivering better investment performance. The research also suggests that a substantial proportion of investors are shifting away from financial advice and adopting a DIY approach, as high fees are now seen as a major problem. According to the survey, 46% believe that independently managing their own investments offers them the best value for money, even at the risk of losing higher investment returns in the long term. A third of savers do not seek expert investment advice because they believe commission costs will be too expensive, MoneyFarm’s research suggests. Besides high costs, investors are concerned about the lack of transparency associated with active fund managers and financial advisers, MoneyFarm said. “This is something that needs to be addressed. Products need to be made cheaper, unnecessary costs need to be eliminated and investors need to have more visibility over where their money is invested, what it is doing and how it is performing,” Paolo Galvani, chairman and co-founder of MoneyFarm, said. “Advances in technology mean that investors shouldn’t have to be charged high fees to get a first class service. High fees mean that many investors are giving up on wealth management services and trying to do everything themselves but without professional asset allocation they risk severe underperformance,” he said.
Research conducted my MoneyFarm shows that 81% of private investors think investment advice is slanted to generate fees driving investors towards a DIY approach. The survey also found that the majority of people who invest in mutual funds are not aware they can get better returns by investing directly with their own money. Paolo Galvani, the firms Chairman and co-founder said both cost and complexity are both elements of the investment process that can be controlled; adding the technology available today, these factors should no longer be a concern when it comes to investing. MoneyFarm has called on the fund management industry to lower charges to improve returns and encourage investors to save more.