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Poor fund fee transparency! What three DFMs really hate

From fund fee transparency to 'cash on the sidelines' three wealth managers reveal the things that really bother them right now.

Peter Sleep, Senior portfolio manager, 7IM, London

INVESTMENT

My investment pet hate is fund providers being less than open on fees. I find it difficult to pin all these fees down, so it must be very difficult for less experienced investors to get an idea of their investment.

We look at a lot of new funds and when you ask what the fees (plural) are you are often told just one, the asset management charge, but not all the other fees that are always loaded on, which can be considerable.

Many funds will also have some sort of upfront fee, but it can be very hard to find out what it is unless you hit on the precise form of words the fund house uses, despite them being more or less the same thing – bid offer spread, swing price, dilution levy, whatever.

PERSONAL

I get annoyed at cyclists on pavements. I am a cyclist and perhaps that makes me more of a zealot about this, but I do find it frustrating at having to jump out of cyclists’ way when they suddenly appear from around the corner. The one exception I make is for mums and dads taking their small kids out, I think that is acceptable, provided the kids stay away from my ankles.

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Peter Sleep, Senior portfolio manager, 7IM, London

INVESTMENT

My investment pet hate is fund providers being less than open on fees. I find it difficult to pin all these fees down, so it must be very difficult for less experienced investors to get an idea of their investment.

We look at a lot of new funds and when you ask what the fees (plural) are you are often told just one, the asset management charge, but not all the other fees that are always loaded on, which can be considerable.

Many funds will also have some sort of upfront fee, but it can be very hard to find out what it is unless you hit on the precise form of words the fund house uses, despite them being more or less the same thing – bid offer spread, swing price, dilution levy, whatever.

PERSONAL

I get annoyed at cyclists on pavements. I am a cyclist and perhaps that makes me more of a zealot about this, but I do find it frustrating at having to jump out of cyclists’ way when they suddenly appear from around the corner. The one exception I make is for mums and dads taking their small kids out, I think that is acceptable, provided the kids stay away from my ankles.

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Steve Hutchings, Business development manager, WH Ireland, Milton Keynes

INVESTMENT

The perception of pensions. Despite ‘simplification’ in 2006 there are still very few clients who understand pensions and how they work. I still regularly hear people say ‘I’m not interested in pensions - they perform poorly and are too expensive’. But when it is explained that the pension structure is actually a huge positive, what the potential tax advantages are, and that it is the chosen investments within them that may be the issue, it is amazing how many of those people have a complete change of mind. Most are totally unaware that they can have some say in what the fund is invested in, and the cost, and these are the major factors that impact on the underlying performance of their fund.

PERSONAL

Jellyfish. From what I can tell, they have no purpose in life other than to sting people!

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Simon Holman, Partner, investment management, Castlefield Investment, Partners, Manchester

INVESTMENT

‘Cash on the sidelines’. This little chestnut gets trotted out frequently to justify why investors should pile into the market to steal a march on the veritable tsunami of cash just waiting to bid stock prices up ever higher. But it’s a myth! If I swap my cash for someone else’s shares, they are doing the reverse and selling their shares to buy my cash. Granted, how keen buyers and sellers are for each transaction will affect the prices dealt at, but the total amount of cash stays the same. It’s a good story, but it’s wrong.

PERSONAL

Appealing to the referee and diving in rugby union. Giants of men falling to the ground in fake pain and spreading their arms as wide as an eagle’s wings to demand the ref’s attention? Just no. Stop it now and leave it to the footballers.

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