Expensive active strategies don't make sense in pinched markets says EBIS. Nine independent financial advisories (IFAs) in the U.K. have banded together to form Evidence Based Investment Solutions (EBIS), a non-profit marketing collective. Its first order of business is to promote the use of low-cost, particularly passive, investment vehicles.

"EBIS has formed to debunk the notion that investment managers can reliably add value to justify high charges," says EBIS chairman Craig Burgess, who also runs Aldridge, U.K.-based IFA Blackstone Wealth Management. "Our member firms have researched carefully and observed that investors are looking for consistent investment performance, not a spectacular year followed by one of failure."

Dual purpose

In recent years, most of the clients EBIS members have taken on come from other IFAs, brokerages and banks with "their invested in overpriced and inconsistent funds and come to us after they have been disappointed," adds Burgess.

EBIS says investors are better off in low-cost plays like index funds and institutional funds that don't pay commissions -- and it says it has evidence to back the claim.

"When markets are good and portfolios show double-digit returns, IFAs, banks and stockbrokers often bask in the glory, although the fund managers have not added any value at all," says Burgess. "Unfortunately for them, recent times have been difficult and their ability to outperform has come under question again."

In addition to touting passive investing, EBIS exists to underline the fiduciary approach taken by its members as a point of distinction between those firms and larger financial institutions.

"We sometime have to use product providers such as banks, insurance companies, investment managers and pensions providers, but we do not work for them," goes a blurb on EBIS' website. "We work for the people who pay us: our clients."

The passage continues: "All this means that while we understand the financial services industry, we are highly [skeptical] about it. We don't take their stories at face value; we examine the evidence and go wherever it leads us."

In addition to Blackstone Wealth Management, EBIS member firms are Newry, Belfast-based Navigator Financial Planning, Glasgow, Scotland-based Forty Two Financial Planning, Lancashire-based Michael Barr & Co., Nuneaton-based Morton-Wilson, cre8 Financial & Business Planners in Worcester, Taunton-based QED Wealth Management and London-based Collingbourne Wealth Management. -FWR

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