Passive investment group to take on active managers

A new group set up by financial planners to promote passive investments has launched today, arguing that active managers do not produce the performance to justify the charges they levy.

Evidence Based Investment Solutions, a new grouping of eight top financial planners first revealed by Citywire, is to use academic evidence and their own research to promote the role of passive investments.

The group says it will ‘debunk’ claims from active managers to produce returns that justify their charges.

‘There are lies, damn lies and statistics,’ said member Darren Baker, director of Somerset-based QED Wealth Management.

‘A lot of the information out there in the marketplace is taken at face value in the industry. When you strip it away, pound for pound, the reality for investors is very different from the one that’s focused on by the industry.’

The new group is targeting accountancy and legal groups, as well as the general public, with its message.

‘We want to demystify investments and bring to people’s attention the UK fund management industry,’ added fellow member David Crozier (pictured), director of Navigator Financial Planning, in Northern Ireland.

‘There is a danger it exists for its own benefit and not for the client’s. Investing in passive investments with proper diversity gives clients a much better experience,’ he said.

Ebis chairman Craig Burgess, director of Blackstone Wealth Management, said member firms could draw on their own experiences to show the role of passive investments.

‘Our member firms have researched carefully and observed that investors are looking for consistent investment performance, not a spectacular year followed by one of failure,’ he said.