Finances AbroadMaking the complicated simple!

One of the most successful fund managers in the UK has openly criticised his industry for charging clients too much and overpaying its managers.

There is a difference between fund managers actively managing a fund, and following the herd. According to Neil Woodford, the majority of fund managers claim to be doing the former, when in reality they only achieve the latter.

There is light at the end of the tunnel, as he believes that wiser customers and stricter regulation will lead to lower fees in the future.

Mr. Woodford set up Woodford Investment Management in May 2014 and has £7bn under management.

Mr. Woodford named the banking industry as well as fund managers in being guilty of overcharging, claiming that both are guilty of “charging active fees for index performance or worse.”

His statement means that fund managers don't actively choose which stocks to invest in, but instead tend to follow a big index such as the FTSE 100 or the S&P 500.

"Retail clients in particular are waking up to the high charges that we've seen in the industry and I think, with some support from the regulator, we're going to see those charges come down," he said.

Mr. Woodford is probably best known for his resistance to investing in the dot com boom of the 1990s and 2000s. He believes that the problem with fund managers is the fear of not performing in the short term, which ultimately means that they miss opportunities for investment in start-ups or to buck the trend.

Tobacco and pharmaceuticals feature prominently in Mr Woodford's current portfolio, as well as many businesses in the early stages of development. For more information, visit the Woodford Management Website.

Related News:

Fund Manager Definition | Investopedia

A fund can be managed by one person, by two people as co-managers and by a team of three or more people. Fund managers are paid a fee for their work, ...

Related Videos:

Active Fund Managers, Index funds, Industry Analysis, Management Charges

By admin

---

---