Actively-managed funds 'overcharging' investors by £6.7bn a year

Should be charging investors passive fees

Fund managers could be overcharging UK investors an estimated £6.7bn a year for active funds which underperform their benchmarks, according to research from financial adviser Salisbury House Wealth.

The firm calculates that of over £1trn invested in funds in the UK, £924bn sits in active funds, around three quarters of which failed to beat their benchmarks. The assets sitting in these underperforming funds amount to around £690.2bn, for which investors are paying £10.2bn in fees every year.  An actively-managed fund costs investors on average 1.48%, while a passive fund charges only 0.5% on average. The firms argues investors are overpaying for these active funds, that should be charging passive prices. It calculated the total amount overpaid by investors for these underperfor...