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The Consumer Council believes that Finanstilsynet must decide whether there is a violation of good business practice when banks recommend active funds without excessive returns that can be documented.
Many people save money, but there is a big difference in the fees you must pay.
Erlend Aas / NTB
Published:
An analysis by Dagens Næringsliv shows that total active funds do not outperform index funds, largely due to higher costs.
– A single, actively managed, expensive fund can provide excess returns, but the average of all expensive managed funds will depend on affordable index funds. An advisor who does not claim that the expected return of an expensive fund is less than that of a passive fund is misleading his clients, Jorge Jensen, director of the Consumer Council, tells the newspaper.
According to Jensen, the Consumer Council has requested documentation from individual players and the industry as a whole, without receiving anything.
– On the basis of all available empirical data, supervisory authorities should decide whether it is a violation of good business practice to recommend expensive funds without a documented over-performance. It’s obvious that consumers have been hurt by this sales practice, says the director.
A passive fund automatically tracks a stock index. These funds have low fees, often between 0.2% and 0.3% of principal per year.
In active funds, managers value companies and invest money in stocks with the goal of increasing performance more than the performance of the benchmark. The fee can often be 2 percent of the principal per year.
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