Break down investment costs: O'Grady
Simon O’Grady, chief investment officer of Kiwibank – Gareth Morgan Investments and a director of the CFA Society of New Zealand told an INFINZ/CFA Society debate last week about the Financial Advisers Act that the question of commission was a red herring.
The Act is due to be reviewed next year.
“What we are talking about is who is going to pay for advice, and how are they going to pay it? Commission is not really the issue, it’s the conflict of interest and there are a variety of different ways of addressing that. But a bugbear of mine is that the cost of delivering quite basic investment outcomes for clients is far too high.”
He said once manufacturer, platform and advisory costs were added, investors were paying more than 1% and sometimes up to 3.5% for standard equity products.
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