And that suited the managers. They were interested in selling their wares to institutions like insurance companies and pension funds; they did not want to be bothered by private shareholders. Now, the men in grey suits have donned flamboyant ties and their conversation is peppered with words like user-friendly, marketing and savings schemes.
The new attitude was spurred by self-interest. Over the last decade, insurance companies and pension funds have dramatically increased their in-house investment teams. They no longer need investment trust managers to handle their money and take investment decisions for them; they want to do it themselves.
The institutions were willing to take any route available to reduce their holdings in investment trusts. Large institutional holdings in several trusts, including Globe - one of the largest - have been sold by their institutional owners, allowing them to be taken over. Trust managers are anxious to stop that happening again, which means they have had to look for a new market for their skills.
In choosing the private investor, trusts are going back to their roots. The first trusts, established more than 120 years ago, were designed as collective investment plans. The aim was to pool the funds of a number of private individuals so that investment could be more widely spread and the risks reduced.
Winning that market back has not been easy. Exact statistics are hard to come by, because of the large number of shareholders who use nominee accounts, but the Association of Investment Trust Companies (AITC) estimates that the proportion of trusts held by individuals has risen from 10 per cent to 35 per cent in the last 10 years.
One of the most successful ways of attracting private shareholders has been through savings schemes. Hitherto, the only way to buy and sell shares in an investment trust was through a stockbroker. That is costly and, unless you have a large amount to invest, it can be difficult to find a stockbroker willing to act for you.
Savings schemes are established by the trust's managers and allow you to invest either a lump sum or regular monthly amounts directly into the trust. In most cases, the charges are low - some are free - and they remove all the complications of share buying.
So far, 34 fund managers offer savings schemes covering 136 trusts. These include Alliance and Second Alliance, Henderson, Fleming and Martin Currie. A record amount - pounds 33.49m - was invested into trusts through savings schemes in the last quarter of 1992, according to AITC statistics just produced. That brought the total invested for the year up to pounds 115.5m, down slightly on the previous year's pounds 119.5m, but a big improvement on the pounds 89,504 invested just eight years previously.
Apart from the ease of buying and selling, regular savings schemes also reduce the risks of investing. Prices on the stock market can be volatile, falling or rising as much as 20 per cent in short periods. If you put in smaller amounts at regular intervals, you take advantage of the low points - by getting more shares for your money - which helps compensate for the times when share prices are high.
The schemes are all different, with minimum monthly payments ranging from pounds 20 for Gartmore and Martin Currie to pounds 100 at Henderson. You should also check the small print for details of charges before deciding where to put your money. For example, John Govett, Fleming and Touche Remnant all charge 1 per cent commission on buying and selling shares in their trusts, while some companies, such as Dunedin and Thornton, charge nothing for either.
Shares in an investment trust can also be put into a Personal Equity Plan, which allows you to escape tax on dividends and capital gains. In last year's budget, the amount which you were allowed to put into trusts through a PEP was doubled to pounds 6,000 a year. There are now more than 24 PEP schemes, giving access to more than 69 trusts. There are still restrictions on the types of trust which can be put into a PEP, although the industry is lobbying hard to have them removed.
As with savings schemes, it is worth considering the charges before you decide to put your money into a PEP. For many people, the charges could outweigh the benefits of the tax-savings.
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