Investors are paying over a fifth less in annual fund fees as a result of the Retail Distribution Review (RDR), introduced by the UK government in 2013.
The initiative banned commissions paid to financial advisers by fund companies for selling their products. Instead, investors now have to agree fees with their advisers upfront.
A study by online investment platform Rplan found that the average annual fee paid for the top 100 funds on its platform had fallen by 22%, down to 103 basis points.
Investors are also saving money due to higher passive investment. In the first quarter of this year, over a quarter of the most popular 100 funds sold on Rplan’s platform were passive, compared to 10% in the same period in 2013.
Please read the full article from Funds Europe here.