SOMETHING FOR THE WEEKEND
Transparency
For anyone who wants to see a fairer, more transparent asset management industry, this five-minute interview is compulsory viewing. Transparency.
It features Andy Agathangelou, founding chair of the Transparency Task Force, of which I have recently become an Ambassador. In the video, Andy explains how the Task Force came about, why transparency is so important and why there’s such a lack of it.
He also explains how people can get involved in the campaign for greater transparency if they’d like to.
Think of fees like termites
I’ve always liked John Oliver, but I’m now an even bigger fan of this Birmingham-boy-made-good after a hilarious takedown of the financial services sector on American television.
It first aired in the US eight weeks ago. Frustratingly, it has only just been made available to YouTube viewers in the UK.
Go on, treat yourself to the full 20 minutes. It’s packed with great one-liners, including this one on fund fees:
“Think of fees like termites. They’re tiny, barely noticeable, and they can eat away your f—ing future.”
Enjoy!
Sleeping with the enemy
For those of us who’ve worked out how it operates, it’s hard not to feel resentful of the investing industry.
Depending on where in the world they are, investors are typically losing between a half and two-thirds of their potential returns in costs. Compounded over, say, 40 years, that can rise to three-quarters or even more. As well as making fund managers some of the highest-paid professionals in the world, the fees and charges consumers pay are lining the pockets of an array of intermediaries who, frankly, do little or nothing to deserve being paid at all.
As a result, around the globe, thousands of people are retiring every day with insufficient funds to last them for the rest of their lives.
But, on their own, neither anger nor righteous indignation achieves anything.
Risk Capacity — Index Funds the Movie 10/12
As investors we’re all different, and we all have our own unique capacity for risk. Working out the appropriate level of risk for each investor is one of the most important responsibilities for a financial adviser. Alas, it’s one that many advisers — and indeed many of their clients — don’t take seriously enough.
This is the tenth video in this series, which is based on the book Index Funds: A 12-Step Recovery Program for Investors, by Mark Hebner. To describe investment risk, Mark uses the analogy of a bucking bronco, leaping up and down, rearing, kicking and twisting. Investors are like bull riders, and matching the right portfolio to an individual’s ability to handle risk is like finding the right bull for each investor to ride through the ups and downs of the market.
History — Index Funds the Movie 9/12
Instead of wasting time trying to predict what might happen in the future, investors should spend more time acquainting themselves with what has happened in the past.
Of course, history never repeats itself exactly. But by studying how the financial markets have performed over the last 50 or 100 years or more, we can build a reasonably accurate picture as to the sort of performance we can expect to see over the long-term future.
Previously in this award-winning series:
Worth reading
Evidence:
We need less dogma, more evidence-based investing (Wesley Gray)
What are the costs of socially responsible investing? (Larry Swedroe)
The industry:
The lies the industry tells and investors believe (Anthony Isola)
The growing popularity of indexing is eating into the fund industry’s profits (Eric Balchunas)
The explosion of obscure-sounding ETFs is becoming faintly ridiculous (Robin Wigglesworth)
Funds:
Beware — all ETFs are not created equal (Ben Carlson)
Is it really worth trading in your index fund for a cheaper model? (Monevator)
When researching investment funds, beware of online reviews (Michael Piper)
Behaviour:
When “too much” starts making you unhappy (Carl Richards)
Stop putting your own company’s stock in your investment portfolio (Jason Zweig)
Patience is the secret to wealth and health, new study suggests (Adam Creighton)
No matter how plausible they sound, ignore the advice of market pundits (Roger Nusbaum)
Advice:
How do you choose the right financial adviser? (Richard Wohlner)
How to make the most of working with a financial adviser (Tim Maurer)
Finally.. Introducing Regis Plus
Evidence-based advisers may like to know that Regis Media, the firm that produces and sponsors The Evidence-Based Investor, now provides a comprehensive social media service for advisory firms. It means that all your social marketing is taken care of by specialist experts, allowing you, the adviser, to focus on what you do best and enjoy most.
The service is called Regis Plus, and if you’re interested, please call Sam Lewis on +44 (0)121 285 2585 or email him at sam@regismedia.com, and he will be happy to provide you with further information.
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.
