Professional fund managers at Fidelity, Aviva, and St. James's Place typically return 3.7% to 5% annually before fees and inflation. Two speakers argue the underperformance is systemic and recommend buying stocks yourself through an ISA or SIP instead.
That's part of the reason.
I'll stick to that one for now.
The things I want to cover in this, because these are the questions which come up, obviously people then go, well, who's a better fund manager in that case? And obviously the answer is, well, actually, no, the whole industry is the problem. And the solution is learn how to buy stocks and things yourself, but in an ISA or a SIP. And we'll come to that. The other thing I want to cover is, are there any names which come up which are surprising? I can tell you from my end, the names, the biggest names that we hear about every day come up. Fidelities, the Avivas, St. James's Place in terms of wealth management. I keep going on about Hondsmyth, the ones which are built up as heroes. And then you see that they've been generating 5% per annum for donkeys and everyone's forgotten. It's a bit like Lidl putting up their prices and everyone thinks, oh, but I remember they used to be good. That thing. So onto some of that, two parts, what names come up and what surprised you? And then the solution.
Well, you've been generous there actually when you mentioned 5%, because the average, when I look back at all the records, is around about 3.7% per annum. So it's worse than 5%. So you've been generous there. The main— you mentioned— I mean, that's lower than a high interest bank account today.
That's right. And that's before inflation. So basically you're paying away fees to people to— what are they giving you? Nothing.
And that could be the layer. That's the difference between getting that 4.5%, 5%— you're paying fees away. So it erodes the growth in any case, the fees.
