Altor spent a day recently with some of the senior team at Vanguard, the £5trillion behemoth of passive fund management.

Their economists are forecasting a 4% per annum average growth rate for equities over the next 10 years which doesn’t compare at all well with the 7% annual growth over the last 10.

In reality it is unlikely that equities will return a steady 4% every year but more likely crashs at some point and then returns to a more ‘normal’ 6% per annum giving an average at the end of the period of 4%.

Their point was that investors might need to get used to an environment where the market has already handed some of today’s return to them already but they got it yesterday. Not comforting if you are a new investor today.

Now no forecast is ever entirely correct other than by random chance but if this one is and inflation is at 2% per annum then the real growth in offer is only 2% per annum. As much of financial services charges this amount, investors will need to get sharper on fees.

There is little point investing if your adviser stands to take all of your above inflation growth leaving you to stand still unless they are adding some other return to your portfolio.

Many advisers will claim to be able to outperform the average investment and if this were possible then this would certainly be enough of a reason to pay the fees. However this is mathematically impossible for all to do and so you might be better served investing direct through an online platform and at least minimising your costs.

The better advisers out there know that their value comes from reducing tax and coaching your behaviour. Both of these can return you more money as tax and investor behaviour are certain to reduce your returns. Even here though a portfolio has to be of a certain size before there is enough to be gained to make it worth the cost.

We have argued before that there simply isn’t enough to be gained from an adviser to make investing amounts below £250,000 through one worthwhile for investors. Going further than this, all investors need to look at the total costs of their adviser relationship and consider whether it can be justified in a new normal of low growth. If not then only two costs can really give, the adviser or the fund manager (preferably both).