Only pay for active management when it can be justified.
Using funds adds another layer of fees, and we are very conscious of this and aim to ensure that any fees spent, are well spent. The default is therefore to invest in a particular asset class passively – using low cost tracker funds. If these are well selected, they are the cheapest way of getting asset exposure and the fees can be as low as 0.07% per annum for a UK Stock Market tracker. Only if we feel that a fund manager can justify his fees – through the likelihood of superior performance – do we use active managers.