View more on these topics

Investment view

The simplest questions can extract the most illuminating answers. So it was in Leeds last week at the IFA Events roadshow. In front of a packed audience at the Royal Armouries Museum, the investment question time panel (of which I was a member) received from an IFA one of the best questions I can recall. “What have you learned over the last three years?” What indeed?

The answers were telling. Newton&#39s Harry Morgan had grown in confidence as a result of what he had learned. His experience of managing client portfolios had made him realise that he was far better equipped to deal with difficult trading conditions and volatile markets than the average private investor. He expected to have his help increasingly sought by those who felt less able to cope with the vagaries of the market.

Independent investment trust researcher John Newlands had learned not to trust statistics. Not only was he scathing about the presentation of performance figures in ads but he found the information put out on asset values, asset and dividend cover and hurdle rates on investment trusts to be highly suspect. Check everything yourself was his view. Good advice but hard to put into practice unless you have his knowledge.

Andrew Watkins from Jupiter had learned humility. At least, I think that is what he meant. Like me, he has a few years tucked under his belt in this business. This lengthy and considerable bear market had been as traumatic as anything he had lived through before. Clients needed more care and attention, in his view. He felt older and wiser as a consequence of the last three years. I knew precisely how he felt.

The question was asked against the background of a savings industry that is failing to persuade people to put money away for the future. You might blame markets for this disenchantment. Certainly, the impression I gain is that there is plenty of cash about if you know where to look, it is simply not finding its way into investment products. Much worse is the fact that those at the lower end of the savings scale now seem more inclined to spend than invest. The market has not helped but, in my view, the Government is equally to blame.

You only have to look at the way it has tinkered with savings products and tried to impose its views on what should be available and how much we can charge. When Peps were replaced with Isas, the opportunity could have been taken to simplify this product. The rather tiresome investment restrictions were swept away but, unfortunately, additional complications were introduced in the form of mini and maxi Isas, cash, life insurance and equity options and, of course, the ability to reclaim tax on dividends.

Then there is its attitude to misselling. Clearly, it is important that wrong-doing is stamped out but, with the apparent delight with which the shortcomings of our endeavours to promote endowment policies, personal pensions and some other products have been be trumpeted, is it any wonder that the public&#39s trust in the industry has been undermined?

It is ironic, too, that the advantages of index-tracking funds (by which I mean their low charges) were exhorted at just the time when markets turned south. The list doesn&#39t stop there. The 1 per cent world may be upon us but competition and greater efficiency should deliver it, not Government intervention. I was much encouraged by the IFA Events roadshow but it reminds me that we need more than the return of the bull market, we need less Government interference.

Brian Tora is head of the Gerrard intermediary division


Delaying tactics

I will soon be 60 and have a collection of different personal pensions. I am already being sent paperwork from the insurance companies but I do not really want to retire yet. Is there anything I should be doing? Several years ago, the answer to this question would have been very simple. However, times have […]

Skandia Investment Management – Balanced Fund

Tuesday, 29 April 2003 Type: Oeic Aim: Growth by investing in global equities, bonds and cashMinimum investment: Lump sum £1,000, monthly £50Investment split: UK equities 55.5%, European equities 10%, US equities 7%, UK gilts 6.1%, UK bonds 5.9%, cash 5.5%, Japanese equities 5%, Far East equities 3%, international bonds 2.5% Isa link: Yes Pep transfers: […]

Charles Gooding

The man taking the helm of the new Association of Mortgage Intermediaries thinks he can get the trade body, formerly Namba, back on track. It seems like a big job but TQ Mortgage Service chief executive and former Namba steering committee chairman Charles Gooding knows the importance of keeping things on track.Tracks govern more than […]

Life office free asset ratios fall but sector secure says report

Life office free asset ratios fell 2 per cent to 5 per cent from 7 per cent in 2002 leaving two to three companies feeling significant pressure on their margins according to research from consultancy Mercer Oliver Wyman.It says despite the fall from 2001, many of the recent concerns over the sector&#39s solvency have been […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm