On average

Having just opened the morning’s post with the exciting news that my little boy’s child trust fund is still behind the curve despite having been invested now for over five years, it got me wondering about “the lost decade”.

When I first started out in the financial world at Equity & Law, we had all become used to double-digit growth. Then as soon as I had got my feet under the desk, the world started on a different path.

It has always been a world of change – I have never known one year to feel like the last. It has been in constant flux, with changing regulators, stockmarket crashes and booms, near global collapse of banks and several retro-spective reviews of business.

Going back to my early days at Equity & Law, page one, paragraph one of their “Idiots guide to investing” stated that it is all about “time in the market”, not ’timing the market’. Well it does not feel like that tactic is paying off for the average punter.

The important word here is average. I am not talking about a carefully managed portfolio of collectives, nor indeed a DFM holding, but an average financial services customer through a bank or less visionary IFA perhaps. Millions of customers up and down the land have been invested for a decade or two and have seen little return on their money and they are starting to lose faith. There is now even talk from some quarters of perpetually wave-shaped performance, which must surely put an end to my idiots guide to investing strategy?

But what of the average customer? It is all very well sitting there basking in your own self-worth knowing that you can outstrip this waveshaped trend but this will not be the case for the vast majority of investors. And by definition doesn’t that mean people will start to try and time the market? Surely this is the way for fools and gamblers?

More than this, I fear that some of the higher-charging IFA propositions will add little value, with TERs approaching 3 per cent which, if wave-shaped returns persist, will eat up most of the growth.

Now more than ever, we need visionary politicians to champion the cause of stability and certainty in retail financial services. I long to hear a politician say the words: “Having weighed up all the issues in great detail, we believe the best decision is to do absolutely nothing at all.” I will not be holding my breath, but live in hope nevertheless.

Tom Kean is director of Thameside Wealth Management