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Julian Gibbs

At the time of writing, the Sandler report has only been out for an hour, so I have not read it thoroughly. My first impression is, however, that if these proposals are implemented in full, the financial services industry in this country will contract to such an extent that it will be difficult for people to get proper advice and competition will be much reduced.

There is certainly a place for tracker funds and, on the whole, they have performed above average over a period over five years or more. However, as a recent Citywire survey pointed out, the best fund managers outperform both their benchmark index and the sector average. For example, I would rather be invested in Roger Guy&#39s Gartmore European select opportunities fund than the Gartmore PSF index fund.

Over 10 years, Guy has achieved a return of 426 per cent compared with 232 per cent for the tracker fund – although that is still above average.

So, Ron Sandler is quite right in saying that the likelihood of above-average performance is clearly there. It must be remembered, however, that because of their charges, albeit low, funds which truly track an index – and many of them do not – are guaranteed to underperform the index over a longer period.

Over 10 years, Gartmore&#39s index fund produced a return of 141 per cent compared with the FTSE All Share return of 154 per cent and the average return of 134 per cent.

I believe that following the best investment management teams is likely to produce much better returns, especially if investors&#39 money is allocated between geographical areas and different sectors of industry. While I agree with Sandler that simple products should be available, I do not believe that these will be the best.


&#39Proposals risk being idealistic&#39 – Selestia

Sandler&#39s focus on asset all-ocation and transparency has been welcomed by Sel-estia but it warns that other aspects of the recommendations do not go far enough or risk being idealistic.Managing director Brett Williams says: “The assertion that simplifying products will prevent them being missold perpetuates rather than resolves much that is wrong with the industry […]

Outside Edge

House price inflation is peanuts. Insurance salesperson inflation is the new hot ticket. Five life companies have clubbed together with other investors to buy 18 per cent of a business (Millfield Partnership) that lost over £7m on a turnover of just over £20.5m last time around. The price appears to value each adviser at £251,462.Aviva […]

Opportunities still exist in active funds says Exeter

There are still opportunities in actively managed funds despite the markets performing their worst in 30 years says manager of Exeter Investment Group fund manager Charles Rawson.Rawson, who manages Exeter&#39s managed growth fund, believes there remain a range of opportunities in several different investment sectors for those investors looking to the long term.He has recently […]

Standard looks to take with-profits to China

Standard Life is aiming to be the first British insurer to export with-profits to China after going into partnership with local life company Heng-An.The joint venture, with £100m in capital, will be on a 50/50 basis in accordance with the Chinese regulator.The licence being sought would allow the companies to operate in Tianjin, which has […]

Retirement - thumbnail

(Another) downhill stroll — retirement planning

A report published this morning by the CIPD (CIPD Employee Outlook March 2015) provides yet more interesting data to the changing landscape of retirement planning. It should be remembered that we are in a period of genuine flux here given that the default retirement age was scrapped three years ago, and new pension freedoms come online in April. Both of these alterations will have a huge impact on how employees plan for their retirement.


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