Fund of Funds are a classic modern day Financial Services product. You basically pay a fund manager to invest your money for you in another Fund Manager who invests your money for you. So fees can be taken off you twice.
Lined up to sell this concept is the reward of bumper commission to Financial Advisors to push these products to private investors.
Meanwhile performance tracking indicates that in many cases these fund of funds are very poorly performing.
The disappointment is that your average man in the street would still rather go to a Financial Advisor and blindly follow what he says without any research to challenge the advice given.
In fact I'm feeling people generally put more research into buying a TV than they would into investing their pension funds. Yet the cost to them could be significant over a very long period.
A simple tracker fund would be 10 times cheaper than a fund of funds and there is no evidence to suggest that the returns would be any worse.
Cheaper still, buy a few shares yourself across the Footsie 100, then you have a reasonable risk free spread.
At the very least, check out the advice you get from your Financial Advisor before sinking your cash into a black hole.
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