Technology stocks may have taken a pounding over the last 18 months but
there is no doubt that technology has an important part to play in all our
lives, not just now but in the future too.
The IT spend in my own firm has been in the millions over the last couple
of years as we seek to deal with more business, make sure we look after
our clients' investments properly and embrace the internet to enhance our
business development. This spend is likely to continue.
Technology has come a long way during the 20 years I have been in the
business. The first reasonable amount of commission that we generated
when we started up was spent on a PC and now we have well over 300-plus
numerous servers, etc.
Despite the improvement in technology, a good old unit trust has managed
to avoid it, maintaining the paper chain and continuing to be a threat
to the rain forests.
One of the advantages of being a stockbroker is that it makes you realise
how quickly stocks and shares can be bought and sold and the resultant
The fact that it is easier for a client to buy and sell a stock on a
foreign stock exchange than it is to buy and sell a unit trust shows how
ridiculously archaic the unit trust dealing and settlement system is and
why change is essential.
The advent of EMX must, therefore, be welcomed. It may not be the perfect
solution as yet but it is a solid platform and certainly a major step
towards an electronic trading platform for unit trusts and open-ended
This is something desperately needed if the industry is going to take a
bigger share of the savings market. This is the reason we have invested in
the project and we shall look to make good use of it, as I hope all other
IFAs and product providers will also do.
A new beginning for unit trust dealing coincides with the launch of New
Star and it will be interesting to see the effect this has on the
marketplace. There is naturally more int-rigue with the launch of this
company bearing in mind the animosity that existed between Jupiter and John
Duffield. His desire to prove that he can do it all over again and this
time much quicker will make interesting viewing.
At the end of the day, it is performance which counts and there is no
reason to doubt that Richard Pease and Alan Miller with their excellent
pedigree will produce the goods in the New Star funds now being launched.
Whether the prospect of such performance justifies a switch from existing
funds and in particular Jupiter's remains to be seen and is a matter for
the individual IFA to make the necessary judgement. All I would say is that
a launch of such a company with such a high profile is certainly a fillip
to the market and anything which focuses the attention of the investor on
unit trusts has to be good news. It might even awaken investor interest.
We all face a tough 12 months. Economic indicators are confusing and I
suppose it is good news that, on the one hand, people are worried about
inflation whereas, on the other, they are worried about economic slowdown.
Opposing views tend to make volatile but interesting markets and give fund
managers the opportunity to make profits for our clients. There is a great
need to study the performance statistics of the various fund managers to
seek out those who perform best when times are tough.
This is where the IFA can add value and earn his commission or fee,
whichever is charged, and justify their existence to the client and the
world at large. With interest rates low, the expectation of returns has to
come down but it is often in these circumstances that some very good
profits can be made.
Do not be tempted to put investor apathy down to the summer malaise and
sunshine. Now is the time to talk to cli-ents, getting them to review their
portfolios and making the odd change where necessary. The launch of two
attractive funds from New Star must be a great catalyst to talk to clients
and make them think about getting their portfolio in shape.
Stephen Lansdown is chairman of Hargreaves Lansdown