Metis Ireland: No blarney, just the evidence
Posted by Robin Powell on December 6, 2017
Evidence-based investing truly is growing around the world. Take my own company, which began producing content for a solitary financial advice firm in Birmingham, England, five years ago. Today we have clients in ten different countries. In fact, make that eleven, because we’re now working with Metis Ireland, an evidence-based financial planning firm with offices in Limerick and Dublin. These guys are hugely impressive and I expect to see the firm grow considerably over the next few years.
I recently interviewed Carl Widger, a director and one of the founders of Metis Ireland, and asked him about the firm’s history, the dismal performance of Irish active funds and his predictions for the future of Ireland’s financial advice profession.
RP: Carl, thank you for your time. Your firm was one of the early adopters of evidence-based investing in Ireland. How did that come about?
CW: When we set up Metis Ireland in 2013, we had a phrase that we kept repeating to ourselves, Our only master is our client. To be true to this, we had to find out if there was a better way to serve our clients, so we set about researching best-in-class financial planning firms in the US and UK. We quickly discovered that research and evidence points clearly to the fact that active fund management rarely (if ever) beats the performance of the market. When you add in the fact that evidenced-based investing costs the investor less, we decided that this was an investment strategy that we had to pursue for our clients.
RP: I haven’t seen any recent data for Ireland-domiciled active funds, but I’m guessing that, as in the rest of the world, there’s little evidence of persistent outperformance?
CW: That’s correct! Irish funds are no different to any other jurisdiction and we have seen evidence of cherry picking investment periods from active fund managers here. Active managers seem to behave similarly, no matter where they are based.
RP: My impression from reading the Irish press is that awareness of the benefits of indexing is growing, but very slowly. Is that right?
CW: Yes, that’s right. It means that we sometimes have a tough job explaining our beliefs. We have successfully used podcasts and videos to help back up our investment philosophies. That said, we have a lot of work to do to spread the message wider. The mission continues!
RP: As you know, the UK regulator, the FCA, is starting to take a much closer interest in transparency and in the value that active managers actually deliver. What’s your own regulator doing?
CW: We are anxiously waiting to see if RDR will come to Ireland. We believe it would help our proposition enormously. However, we don’t think it is likely to happen in the short term. In addition, almost all Irish funds still quote the annual management charge which of course only tells part of the story. There hasn’t been any talk of insisting on a total expense ratio becoming mandatory.
RP: The majority of Irish advice firms are still recommending actively managed funds. But are things changing?
CW: There is definitely a small cohort of advisory firms who are heading towards evidenced-based investing. However, we are a small minority and as long as the fund managers remain as the paymasters, I can’t see that changing anytime soon.
RP: I see that Metis Ireland’s vision is to be the best financial planning firm in Ireland. You certainly can’t be accused of a lack of ambition!
CW: We have a brilliant team at Metis Ireland and I firmly believe that our vision will become reality. We have four years under our belt now and we know that high net worth clients understand, appreciate and value our financial planning and investment proposition. In order to make our vision a reality, we are always searching for like-minded professionals to join our team.
RP: An important part of your philosophy is that you place the client at the centre of everything you do. What does that actually mean in practice?
CW: “Act with integrity when no one is looking” is one of my favourite sayings. We are always asking ourselves if our advice is in the client’s best interest. A great way to answer that question is to ask it another way: If these clients were your parents, would the advice be the same?
RP: I saw you at the BACK2Y adviser conference. I take it you’re a fan?
CW: We loved BACK2Y, and Paul Armson’s musings have been instrumental in developing the Metis Ireland client proposition.
RP: Finally, what are your predictions for the Irish advice profession over the next few years?
CW: That’s easy! Metis Ireland will be the best financial planning firm in Ireland. We will always be synonymous with world-class financial planning, and we hope that our way of doing things will be adopted by other firms.
Let’s change investing for the better