Hargreaves Lansdown head of research Mark Dampier has warned that IFAs can take years to react to downturns in fund managers' performance, in response to Fidelity's suggestion that industry commentators are not representative of advisers' views.
In a letter to Money Marketing, Dampier says that he has repeatedly seen IFAs take as long as three years to react to performance problems although he concedes that Fidelity is better placed than many to sort out any performance issues.
In last week's Money Marketing, Fidelity managing director Robin Threadgold argued that most commentators are not representative of the broader IFA marketplace and often dispense views on businesses they know little about. In particular, he said commentators often commented on firms' commercial health, insisting they know nothing about how well a firm is doing. Threadgold said: “I do not think these people are representative of the broader IFA marketplace. When they are commentators they sometimes step beyond their field of knowledge.”
But Dampier says his comments were concerned only with Fidelity's performance. He says: “It should be noted that the broader IFA marketplace often continues supporting groups two or three years after investment performance has deteriorated. I have seen this repeated time and again in my 20 years in the industry.”