75% of fund investors say that their fund manager delivers good value

Feedback from over 3,000 investors on the value delivered by asset managers in the first six months of 2021 shows three quarters believe their manager offers good value, and although only a limited number say they have read Assessment of Value reports, most find them useful when they do.

As the FCA this week releases its damning report stating fund managers are ‘falling short’ in the Assessment of Value process, Boring Money’s Investor Tracker survey of UK retail investors finds:

  • 75% of all fund holders say that their chosen fund managers deliver them good value. This figure represents a small decline year on year, from 78% in H1 2020.
  • 19% of retail investors say they have read at least one Assessment of Value report.
  • Of these, 58% said the reports were ‘somewhat useful’ and 32% said they were ‘very useful’. Just 10% said they were not useful.

 

Vanguard still the top-rated brand in terms of delivering value

 

According to retail investors, the highest-ranked brands for delivering value in H1 2021 were:

Manager

Ranking H1 2021

Vanguard

1

HSBC Global Asset Management

2

AXA Investment Managers

3

Baillie Gifford

4

Hargreaves Lansdown Fund Managers

5

Royal London

6

Santander Asset Management

7

Fidelity

8

JP Morgan

9

Aviva Investors

10

 

Boring Money CEO, Holly Mackay, comments: “We have spent the last two and a half years really digging into what value means for different types of investors. Retail customers are looking for a plethora of different things from a manager, and judge value on different sets of criteria.”

Brands are perceived to deliver value for different reasons

The research from Boring Money indicates that trust in brands is driven by multiple factors and very few brands are perceived to excel across the board.

With top-ranked Vanguard, 85% of customers say it offers good value in relation to charges and fees but only 44% say it has a good approach when it comes to sustainable investing considerations.

Verbatim responses gathered from investors also illustrate the different factors shaping brand perception. Baillie Gifford, for example, tends to have a more confident customer base who appreciate the active management at a typically low fee - “'I trust the fund managers to actively manage the funds and they have historically higher returns with lower management fees than most.” (Male, age 34)

For some brands, such as HSBC, trust is a key part of the consumer’s value assessment - “It’s a trusted and reliable brand with decent charges.” (Female, age 55).

Artemis, Baillie Gifford and BMO most improved in customers’ eyes

Artemis, Baillie Gifford and BMO have risen the most in the overall value rankings in the last 12 months. Fundsmith and Lindsell Train have fallen the most in terms of overall investor perceptions of value. 

Mackay concludes: “Despite the regulator’s forensic focus on costs and also margins, the retail customer has a much broader view of value, including other factors alongside performance and charges, such as transparency, trust, ESG and communications.  More work needs to go into Assessment of Value frameworks and reports but if we listen to the end customer, this needs to focus on a broad set of inputs, not solely cost and performance.

“Retail investors are not lab technicians and they invest for a whole host of different reasons. We need to protect them whilst also listening to what they tell us they want.”

-ENDS-

For more information contact Mike Glenister on 07503 178 178

Notes to Editors

  • Boring Money’s value tracking is based on the quarterly Investor Tracker survey of UK fund investors. The Investor Tracker goes to more than 1,500 retail fund investors in the last month of every quarter. The scores for H1 2021 are based on responses from 3,040 fund investors in March and June 2021.
  • The table above illustrates the latest top 10 rankings based on the proportion of customers of each brand that say they off good value for H1 2021.
  • Respondents are asked which of the fund managers they invest with offer “good value” and to score those brands on a range of factors based on their view of the overall value offered by each company. These factors include performance, charges, trust and quality of service and are used to understand the factors which determine overall value for customers.
  • The Investor Tracker also includes a wide range of additional questions about the investments, sentiment and intention of customers, providing additional context on what investors think about their investments and how they will invest in the future.

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