The Danish Financial Supervisory Authority has mentioned that all Danish funds must now explain their efforts in order to ensure that that their members have a high return.
Ulrik Nødgaard, the direct of the Danish FSA, stated: "Approximately five percent of the listed departments are passively managed, which is a relatively low figure when we compare ourselves with other countries. This suggests that overall there is not enough focus on costs."
He continued by adding, "We know that costs are generally higher in the actively managed funds. The actively managed funds have the opportunity to beat the market but there is little evidence to suggest that there is someone who persistently do it. Therefore, the FSA ask the directors of the Danish mutual funds explain what efforts they have made to ensure a better return after expenses to members than if the client funds had been placed in passively managed funds. "
Nødgaard, mentioned that FSA will also be looking into bank’s advice and mutual funds, but they need to keep in mind the dissemination of investment certificates, as well as the cost that banks will endure. Thus the aim for 2011 is to perform a study about costs that customers receive from banks and investment advice.
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