Neil Woodford has hit out at the investment management industry for overcharging customers and paying fund managers too much.
In an interview on the BBC’s Today programme Woodford said most fund managers charged active fees for performance which merely tracked that of an index.
Woodford told the BBC: “The industry has overcharged in many aspects. It’s quite clear, in the banking industry and my own industry, that too often, the industry has been charging active fees for index performance or worse.”
He added fund managers are hindered because they seek short-term performance.
“Fund managers are constrained by the fear that if they were to underperform the index for a three, six or 12 month period, their careers would be in jeopardy,” he said.
Woodford left Invesco Perpetual in March to set up his new venture Woodford Investment Management.