The Evidence-Based Investor

#SFTW: A good adviser can add 3% to your annual returns. Here’s how

Posted by Robin Powell on April 29, 2016



All this week we’ve been featuring The Value of Advice, the latest pre-produced video series for advisers from Regs Media.

Here’s the full set of videos in case you’ve missed any:

New series for advisers — The Value of Advice

Four ways an adviser adds value — 1. Asset Allocation

Four ways an adviser adds value — 2. Cost control

Four ways an adviser adds value — 3. On-going maintenance

Four ways an adviser adds value — 4. Behavioural coaching


Cameron joins the debate on fund fee transparency

I must say I didn’t see it coming. But yesterday brought a highly significant development in the campaign for greater transparency in asset management. Speaking at Prime Minister’s Question Time, David Cameron expressed concern that lack of understanding of the true costs of investing is “sapping people’s enthusiasm” for saving for retirement.

He was responding to a question by the Conservative MP Tom Tugendhat, who recently discovered that the total charges on his own investment portfolio were “more than 5% a year” as a proportion of his assets, or “about triple what I had originally calculated”.

Mr Tugendhat later told the Financial Times that he had only been able to find out the real charges being levied on his investments after forcing his wealth manager to disclose them under the Freedom of Information Act.

Read the full article here


Putting investors first

I’m no business guru, but having spent a few years now as a small-time entrepreneur, one thing I have learned is the importance of putting the customer first. Of course, most of us need to earn a living, and those who provide exceptional value deserve to be richly rewarded. But no business can expect to succeed by constantly putting its own interests ahead of those of its customers.

Except, that is, if that business happens to operate in the investing industry. We’ve somehow allowed a culture to develop, particular in fund management and in stockbroking, in which a “me-first” approach is somehow acceptable, almost expected, even desirable.

The Investment Association, for example, the body which represents UK asset managers, last year asked its member firms to sign a Statement of Principles, which included a pledge to put the interests of clients ahead of their own. Out of more than 200 members, just 25 agreed to do so.

It was encouraging then to see that, for the third year in succession, the CFA Institute has recognised May as Putting Investors First month.

Read the full article here


The voice with nothing to sell is hard to hear

There’s been a big response to my comments last week on the inherent conflicts in financial journalism.

Briefly, to recap, the point I made is that the media and the fund industry have a symbiotic relationship: they need each other. True, investment magazines and newspaper money sections are financial dependent on advertising revenue from fund providers and retailers. But more important, for me, is that journalists have an insatiable demand for stories, and that actively managed funds provide a steady stream of things to write about.

My post prompted a particularly thoughtful and well-written article by Kathryn Saklatvala, Managing Editor at Euromoney Institutional Investor.

Read the full article here


Other TEBI posts you may have missed

Investors should trust the evidence, not the Mail on Sunday

The less you pay the more you end up with

The making of an evidence-based investor

UK investors are embracing passive — advisers must too


Also worth reading

It’s the high fees you don’t see that can really hurt you (Jeff Sommer)

If you want to retire aged 90, here’s how to go about it (Wade Slome)

High Active Share is no panacea for the ills of active management (Larry Swedroe)

Be under no illusion — correctly calling the next crash is extremely difficult (Charlie Bilello)

Be wary of anyone claiming to be an expert on the future price of gold (Cullen Roche)

Why have active managers performed so poorly since the financial crisis? (Barry Ritholtz)

Don’t fear drawdowns. The stock market is in a drawdown most of the time (Ben Carlson)

Choosing an investment platform: A nuts-and-bolts guide for UK investors (Monevator)

Ignore the industry spin. You don’t need to beat the market and shouldn’t try (Robert Seawright)

Be wary of anyone proclaiming themselves to be an expert on the future price of gold (Cullen Roche)

Trying to control the uncontrollable — Oppenheimer Fundamental Alternatives (Index Fund Advisors)


And finally..

Monday is a Bank Holiday in the UK to celebrate May Day — or International Workers’ Day, if you prefer.

Either way, this particular worker is feeling rather exhausted after a particularly hectic week, so I’m treating myself to an extended weekend, returning to TEBI Towers on Tuesday.

So, whether you’re going to be dancing round the Maypole or marching through the streets singing The Internationale, have a good one!

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Robin Powell

Robin is a journalist and campaigner for positive change in global investing. He runs Regis Media, a niche provider of content marketing for financial advice firms with an evidence-based investment philosophy. He also works as a consultant to other disruptive firms in the investing sector. Regis Media.

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