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Letter to the editor: IFAs aren’t fund pickers

Dear Sir,

Given that a large percentage of active fund managers (with all the resources available to them) struggle to beat their respective benchmarks, what makes IFAs think they can do any better?
The reason I ask this question is that having recently attended a PFS minds-stretchers event, I was astonished to note just how many of my fellow diners thought that they could do just that. 
Now I don’t doubt that some of those I met that evening are very well meaning but investment professionals they are not. 

Sadly I couldn’t help but get the feeling that their investment propositions were more about justifying their annual ‘advice fee’ than they were about providing a sound and robust investment service. 

RDR is raising many questions but perhaps one that is at the forefront of many advisers minds is ‘what is it that I actually do to justify my annual advice fee?’. It would appear from my recent observations that this is a question many of my peers are finding difficult to answer.    

Simon Torry

SRC Financial Services Limited

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There is one comment at the moment, we would love to hear your opinion too.

  1. Just because you feel unable or unqualified and just because there may well be some who make a mess of it, it certainly does not follow that we are all numpties when coming to investment advice.

    Annual valuations compared to indices and APCIMS keeps you honest and if you feel that your performance holds its head up and that clients are also satisfied, then I guess in spite of your unctuous comments, some of us actually know what we are about.

    Comparing us to fund managers merely illustrates your lack of grasp. We are not wedded to individual fund managers of sectors. We are able to pick and choose and some in fact do quite nicely. We are able to place as many finds in a portfolio as may be warranted. True if you only have 4 funds in a £00k investment you are putting a lot of faith in those managers. Anyway what a lot forget is that at the bottom line it isn’t about funds or sectors it’s about companies, volatility and turnover. After all equity investing isn’t amorphous – it’s all about investing in decent firms, with good prospects and if appropriate decent dividends. That they are packaged up doesn’t mean you don’t look or consider. The acid test is how you manage your own money. Investing on your own behalf is a great object lesson.

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