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ETF pioneer Graham Tuckwell urges customers to ditch big banks for online start-ups”

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He said one of the areas consumers could get a better deal was in foreign exchange.

“International [money] transfers should be a hell of a lot cheaper,” he said, pointing to start-up banks in the UK such as Revolut, which has recently arrived in Australia, and Monzo Bank, where the cost of exchanging currencies is virtually nothing.

British money transfer company Transferwise has also set up in Australia.

Mr Tucker was the founder of ETF Securities, which was one of the biggest ETF providers in the world. In 2003, he launched the world’s first gold fund when it was listed on the Australian sharemarket.

He has returned to Australia following nine years living on the UK island of Jersey. His net worth was estimated at $575 million by the Financial Review Rich List in June this year. Last year he sold his European and Amercian ETF businesses.

He will retain his London-based business, which has been renamed ETFS Capital, of which Mr Tuckwell owns more than half. The business backs ventures and start-ups in the ETF sector.

Mr Tuckwell predicted huge growth in the ETF industry but said investors needed to be able to compare products and have the data to help them look under the “bonnets” to make informed decisions.

ETFS Capital has invested in companies in Britain and the United States that provide ETF data, and the tools to interpret the data.

“We are trying to democratise this kind of stuff – it’s only the big institutions that have got all of this type of data,” Mr Tuckwell said.

Most ETFs are “passive” investments in that they track a market index, such as market indices and sub-indices in Australia and overseas, or track prices, such as commodity prices, and even currency exchange rates.

There are roughly 200 ETFs listed on the Australian market, whose units are traded in the same way as shares.

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“Active” fund managers, those who promise to beat the market in which they invest, often fail to do do so, particularly after the relatively high fees they charge their investors.

ETFs are popular with smaller investors, especially those with self-managed super funds, because they can add diversification at low cost to portfolios often skewed heavily to domestic investments, such as the big dividend-paying shares.

Mr Tuckwell said he expected the ETF market in Australia to continue its rapid growth. The local ETF market is worth more than $50 billion from about $1.5 billion in 2008 but it is still only a small part of the managed funds market in Australia.

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