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Passive funds have decades of experience selling low-cost products. In general, their awareness-raising focuses on bemoaining the compound effect of high fees - how paying 2% more in fees per annum can result in you having 60% less savings over a 40 year people, for instance.

A lot of ETF funds here play a bit of an educational mission. They have regular commentaries and features on financial media, often around ‘demistifying investing’ and always talk to how passive is so much better than active+fees.

I’ve often been shocked at how low the level of financial literacy is amongst even highly educated people. The standard passive marketing pitch appeals to them because it’s so much less opaque than active approaches.

I’ve long wanted to do something similar in South Africa. I think the key is ease of setup and building in scheduled contributions. If your customers are putting in a set amount each month then your revenue grows year on year even if your market share stalls.

Yes, I agree. And to improve financial literacy has proven to be a very hard, there's just too much noise when talking about money. We've seen mutual funds in LATAM charge up to 7% and for some reason nobody seems to care. We are currently tackling the highly educated tier as you say, they care and want to understand, and we believe that this niche might help us expand further.

Is it legal in Chile to show synthetic returns? If so, you could backtest your passive strategy and plot that on a chart along with the median mutual fund return. Heck, in South Africa only 18% of mutual funds beat the market over 5 years. Break the mutual fund returns down into returns before fees and returns after fees to show just how dramatic the effect is. With that single chart you can point to anyone, regardless of education, and say, ‘see that wedge, labeled fees? That’s what is financing your fund manager’s yacht.’

Legally, we cannot say "see, this is Fintual" when referring to the backtest, but we could definitely do the comparison and show how a passive strategy beats most of those yacht hungry managers. Great idea. We have done a simple chart that shows how fees eat people's lunch here https://fintual.com/simulador but we still need to iterate on top of that.

I'm in Cape Town and have had similar ideas. Want to collaborate? If so, hit me up on Gmail. Same username.

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