In business, especially when you are competing at a national level, information is ext-remely important. Throughout our industry, I have always found it difficult to dissemin-ate the trading information which comes from the various trade bodies.Of course, it does take two to tango. The wholesalers, the unit trust groups, the investment trust groups, the life companies and banks can be economical with the truth. This means the organisations producing the statistics are going to find a serious problem providing the right information. I do not just question the quality of the information they are provided with, I sometimes wonder whether these trade groups understand the industry on which they are reporting. Some of the things I see in our industry do add weight to the argument that we really are a bunch of amateurs. It would appear sometimes that the only thing the IMA is good at is changing its name. I had only just got used to the UTA when it became the unpronounceable Autif and now we have the wonderful IMA. I think it took the IMA two years to work out what was happening when fund supermarkets came into play. I had dropped the IMA a couple of lines suggesting it ought to look at what was happening in that area. The other problem I have is with groups’ reporting. I do not want to name names here but there are one or two groups which consistently claim to be among the leaders in attracting new money, a claim which is easily disproved when you look at total funds under management, even despite market movements not increasing anything like their sales claims. I have even seen life companies show how much more they have under management but when you look at the total, it equates to something less than the movement in the market, less I presume because life company funds do not perform as well as the market. I have also noted with interest the antics of some of the more struggling fund supermarkets. There is a highly confidential report published about the industry which is only available to subscribers. I am reliably informed that each quarter, one particular fund supermarket claims astronomic figures but no one can work out why they do not ever seem to get very far ahead. Perhaps somebody has not told them that if you start with 1bn at the start of the year and then you claim during the year that you have attracted a further 0.5bn and the market has gone up 10 per cent, there is something fishy with your figures if you only have 1.2bn at the end of the year. I suppose it is hardly surprising that the industry beh-aves this way both at company and trade body level. It still bemuses me that the company reps, even though they have wonderful titles such as regional sales director and so on, get remunerated on persuading a discretionary fund manager to pick up 0.5m of units and persuades his own company to sell them to them at creation. He takes his commission and a month later, the discretionary fund manager moves it on. The group never makes a profit and there is no clawback imposed. It is even worse with the life companies although they have tightened up recently. Stakeholder pensions were just brilliant. You could churn one of those every two years, not disadvantage the client but take 10 years indemnity commission twice. No doubt, the company also paid the rep (sorry, broker consultant) commission. I have heard cases where a new broker has been appointed to a scheme and picked up the commission for not moving it. Does anyone want a reciprocal arrangement with us? All the above says if the various firms which charge management fees can be so lackadaisical about how they reward their reps and brokers, it does add grist to the mill that investment charges are too high. I suspect this makes the charges on hedge funds nothing less than daylight robbery. Which brings me to performance fees. I believe the industry should be very vociferous and verbally anti-performance fees. They only benefit the fund managers. Do they treat the client fairly? Peter Hargreaves is managing director of Hargreaves Lansdown
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