SOMETHING FOR THE WEEKEND
Inducements.
Imagine you’re a financial adviser. A fund management company invites you and your wife to watch your favourite comedian, rock band or sports team. Best seats in the house, followed by a slap-up dinner and drinks, with a gift thrown in for your other half. Be honest. The next time it comes to proposing an investment strategy to a client, wouldn’t you be tempted — just a teeny-weeny bit — to recommend a fund managed by the company that offered you the hospitality?
We’re all human. As a journalist, I’ve enjoyed this sort of hospitality several times myself. Has it impacted on the way I covered stories involving the companies concerned? Put it this way, it certainly didn’t make me more inclined to give them a hard time.
It’s concerning then to hear that, one year on from the issuing of guidance on inducements by the Financial Conduct Authority, many UK product providers are still flaunting the rules. The regulator told Money Marketing that it has written to 23 firms asking for more details of distribution agreements and hospitality benefits.
Other posts you may have missed..
What has the fund industry got to do with the rise of Jeremy Corbyn?
“Best-buy” fund lists are ripe for regulation
What would Brexit mean for UK investors?
If you’re determined to use active funds, at least do this
Which of these funds would you choose?
No one said it was going to be easy
In which countries do fund managers charge the highest fees?
Which countries have the best (or least incompetent) fund managers?
Also worth reading..
Investor behavior:
Investors must be patient? Having trouble with that? This might help (Jim Dahle)
Here’s what Warren Buffett wouldn’t do. Maybe you shouldn’t either (Bloomberg)
Humans are hard-wired to see patterns where none exist (Tim Richards)
Stop trying to analyse short-term market movements (Morgan Housel)
Don’t worry about volatility. You should be embracing it (IFA.com)
Index funds & ETFs:
Two big arguments against index funds fall short (John Rekenthaler)
Lessons from the 20 worst-performing ETFs (Allan Roth)
The “indexing bubble”:
What if we converted everyone and the whole world indexed? (Tadas Viskanta)
Hedge funds:
Hedge fund returns over the past 10 years have been disastrous (Charlie Bilello)
What are hedge funds good for? Absolutely nothing (Peter Lazaroff)
High-frequency trading:
What impact does FHT have on the markets? (Larry Swedroe)
Financial media:
You do not get paid for knowing yesterday’s news.. unless you’re a pundit (Jeff Miller)
Financial education:
How a Nobel Prize winner taught his children to manage money (Libby Kane)
Advisers:
There are no shortcuts to assessing an investor’s risk profile (Carl Richards)
Three characteristics of a successful investment firm (Ben Carlson)
And finally..
This isn’t a cry for help, just a gentle reminder that The Evidence-Based Investor isn’t funded by any product provider; we don’t have sponsors or advertisers or, alas, any wealthy benefactors. This is a self-financed service. To be more accurate, the content and social marketing is provided gratis, on a pro bono basis, by my company Regis Media.
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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.
