Think of the company you work for. Add up the wages of everyone on the payroll— from the managing director down to the receptionist and the caretaker. Divide the total annual pay bill with the number of employees. What, on average, do your colleagues earn each year? Fund fees.
Now think of the average UK asset management company. If I told you the average annual pay of all the staff who work there was more than £225,000 — about nine times the average UK salary — you may well be shocked. But that, according to Dr Christopher Sier, is the correct figure.
Dr Sier is a statistician and consultant, and a fellow member of the Transparency Task Force, and since 2008 he’s been researching the different layers of cost involved in investing in UK equity funds.
Cost, he argues, is an issue that investors simply don’t take seriously enough. He says UK investors are routinely hit with more than a hundred fees and charges, many of them hidden; typically they’re paying around ten times more than they think they are.
This video concludes our three-part series on UK fund fees. In it, Chris discusses his research and its implications for consumers. He also suggests a simple way in which the fund industry could reduce the cost of investing at a stroke — paying its staff more realistic salaries.
Related posts:
The shocking truth about UK fund fees 1/3
The shocking truth about UK fund fees 2/3
Introducing the Transparency Task Force
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Robin is a journalist and campaigner for positive change in global investing. He runs Regis Media, a niche provider of content marketing for financial advice firms with an evidence-based investment philosophy. He also works as a consultant to other disruptive firms in the investing sector.
