More advisers would choose active funds if they carried the same fees as passive products, according to a poll by Schroders.
The Schroders’ Annual Adviser Survey found 87% would choose active funds over passive funds if charges were the same.
However, more than half of the 225 advisers questioned said they expected to use more low-cost, passive funds within portfolios to reduce the total fees paid by clients.
Robin Stoakley, managing director of UK intermediary at Schroders, says: “Clearly UK financial advisers still prefer active funds over passive funds. We believe that actively managed funds with strong fundamental investment processes are a great alternative to passive funds which simply allocate capital according to size.
“With the introduction of RDR, advisers will be keen to keep costs low and as a result we expect to see low-cost funds rise in popularity.”
According to the survey, just 1% of respondents invest three quarters or more of their clients portfolios in passive funds.
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