Independent Financial Advisers fees vs Novice Investor!

Lokolo

darkpool wrote: »

i would have thought anyone with even a basic grasp of probability would know the chance of getting 8 heads with 10 coin tosses is nowhere near 0.1%.....

I do, as proved by my A Level Maths..... typing the wrong thing into Excel without a care in the world doesn't mean I am not intelligent

darkpool wrote: »

UT advertising implies that they outperform the market ie the adverts concentrate on what quartile performance they have achieved. So why can the fund management industry not supply academic evidence to show that fund management is worth the fees?

What adverts? Pretty sure it's against advertisement rules to say "Last quarter we go 15% above the benchmark, buy our fund."

darkpool wrote: »

If there were a few economic professors that wrote a report that said fund management provided consistent reliable alpha returns I would consider investing in UTs. But, so far there appears to be no one of any academic integrity that will put their name to such a study. So why is this? Is there a worldwide conspiracy that wants to keep the magic of fund management for a select few? Or is it because fund management charge more in fees than they deliver?

I am pretty sure I pasted one of my funds which consistantly beat the index over a 10 year period. Is that not good enough?

Not quite sure how Trustnet returns graph is not a reliable source of information, for it is data that cannot be made up or made to look better than it is.

darkpool wrote: »

You work in the fund management industry, why don't you just explain to your PR department that someone called darkpool on the MSE forum thinks UT investors are a bunch of fools for paying for a service they don't receive, just ask for some academic* evidence that fund managers deliver alpha returns. Do it now and come back with some solid evidence. Go on do it man!!!! Shut me up with some solid evidence and become the hero of all the vested interests who post in "saving and investments".

I don't work in the Investment side so why would I bother?

darkpool wrote: »

with respect, you seem to be the one that bangs the UT drum. even though there is very little evidence that fund management is worth the fees.

so far the evidence presented in support of UTs is basically pointing at a few funds that have done well.

And in the grand scheme of things, that's all that matters! If you want pizza, and you think Domino's is the best, you go to Domino's, not Pizza Hut! You may go to Domino's because you like their method of making pizza, or their choices of toppings. Or if you don't want that but go on cost and vanilla, you buy a Asda value pizza.

----

You have a giant problem with fees, and I doubt anyone would disagree if fees were reduced. However, to paste a US article about Trackers vs. Managed is biast and wrong (considering we are in the UK). By all means I have never said trackers should never be considered, and vice versa, gadget has never said that someone should never invest in managed. However you seem to think you know it all from reading 2-3 articles to support your wild imagination.

The other thing that really has ****ed me off about you is you come on this thread and completely derail it from the OPs (who is new to this site) question to suit your own conquest to get everyone to think you are right about everything.

If you want to have a discussiona bout Managed vs. Trackers go back to the other thread, but to constantly climb upon other threads is rude. I have tried to keep my discussion on this thread (about M vs. T) short and sweet but it's starting to get on my nerves. This is not the first time you have done this.

gadgetmind

Ark_Welder wrote: »

They are, but they did chose to lower it in the first place.

Yes, and they had their reasons, but it backfired.

Perhaps an increasing use of actual trackers will weed out these managers and just leave those that can do a reasonable job.

Of course, we might just find that the whole field is weeds as study after study has shown that "hot hands" is pretty much a myth. I also saw a study recently looking at fund managers who were fired for under-performance. It found that they then went on to outperform their replacements as about the rate that regression to mean would lead you to expect.

Another problem with trackers is that there are so many. Why?

There are loads of ETFs but not that many trackers, and both are dwarfed by 1000s of active funds we have in just the UK.

that there are two equity trackers that track different things: one the S&P500, the other a 'north-american index'

North America also includes Canada, so more minerals exposure etc. I'm quite happy to leave both covered by a global equity tracker or to equal weight if using components.

This could still depend upon what you mean by 'property': listed vehicles in a particular sector or the equities martet, or the uncorrelated physical assets. The latter would be difficult to track - and retain liquidity - without being synthetic.

I finally rejected REITs (and REIT trackers) as they track equities too closely, but infrastructure REITs such as HICL are tempting.

gadgetmind

Lokolo wrote: »

I am pretty sure I pasted one of my funds which consistantly beat the index over a 10 year period. Is that not good enough?

No, because cherry-picking using your rear-view mirror can be used to prove anything you want. Even back-testing *all* of the existing active funds would prove nothing as those that fail miserably are quietly ditched or merged into something else.

The chances of picking a fund that will consistently beat its benchmark over the medium/long term are very low. That doesn't mean zero, just low, too low to justify the potential upside IMO.

gadgetmind

Lokolo wrote: »

The other thing that really has ****ed me off about you is you come on this thread and completely derail it from the OPs (who is new to this site)

Yes, I'm also conscious that we've rather gone off on one in a completely inappropriate thread.

darkpool

Lokolo wrote: »

I do, as proved by my A Level Maths..... typing the wrong thing into Excel without a care in the world doesn't mean I am not intelligent

I am pretty sure I pasted one of my funds which consistantly beat the index over a 10 year period. Is that not good enough?

I don't work in the Investment side so why would I bother?

You have a giant problem with fees, and I doubt anyone would disagree if fees were reduced. However, to paste a US article about Trackers vs. Managed is biast and wrong (considering we are in the UK). By all means I have never said trackers should never be considered, and vice versa, gadget has never said that someone should never invest in managed. However you seem to think you know it all from reading 2-3 articles to support your wild imagination.

The other thing that really has ****ed me off about you is you come on this thread and completely derail it from the OPs (who is new to this site) question to suit your own conquest to get everyone to think you are right about everything.

If you want to have a discussiona bout Managed vs. Trackers go back to the other thread, but to constantly climb upon other threads is rude. I have tried to keep my discussion on this thread (about M vs. T) short and sweet but it's starting to get on my nerves. This is not the first time you have done this.

But using one fund as proof that fund management is worth the fees suggests your grasp of binomial probability is poor

I've got details of a fund that has lost 6% a year over the last decade. do you accept that as proof that fund managers are duff? or do you accept that using one fund as evidence is a ridiculous argument?

http://www.fundsupermart.com/main/fundinfo/viewFund.svdo?sedolnumber=FOR003

If you want to shut me up you should go to the PR department and ask for that evidence. Most PR girls are really fit, and if you got the academic evidence you would shut me up and become an MSE hero.

I don't have a problem with fees, I guess i only pay three figures a year in fees. It's the poor blighters in UTs that have the problem with fees.....

Would it surprise you if i said i had no trackers?

darkpool

gadgetmind wrote: »

Yes, I'm also conscious that we've rather gone off on one in a completely inappropriate thread.

yeah fair enough, but i consider this type of forum like a conversation down the pub. it starts of somewhere and takes a million twists and turns.

anyway, if it hadn't turned into a fund manager/ fee argument it would probably have died after 10 responses.

Lokolo

darkpool wrote: »

But using one fund as proof that fund management is worth the fees suggests your grasp of binomial probability is poor

I've got details of a fund that has lost 6% a year over the last decade. do you accept that as proof that fund managers are duff? or do you accept that using one fund as evidence is a ridiculous argument?

http://www.fundsupermart.com/main/fundinfo/viewFund.svdo?sedolnumber=FOR003

But it doesn't matter to me, I am not picking a fund out of a hat am I? If I was then yes, your argument with the statistics would be sound. But I am not picking out of a hat, I am picking one which suits my needs. I don't think to myself oh I want a UK equity fund, lets have a looky, put all the names in a hat, oh ok this one will do.

If you want to shut me up you should go to the PR department and ask for that evidence. Most PR girls are really fit, and if you got the academic evidence you would shut me up and become an MSE hero.

Right. I doubt it would help me become an MSE hero, because I already am.

I don't have a problem with fees, I guess i only pay three figures a year in fees. It's the poor blighters in UTs that have the problem with fees.....

Would it surprise you if i said i had no trackers?

Yes.

OK which is fine, I am in agreement with you. But at no point during these threads have you said "Oh well sometimes a managed fund is worth the fees". You constantly say "I R NEVER PAY 3% MORE BECAUSE IT'S A WASTE OF MONEY." and leave it at that, then post a few articles you found from Google, then moan and moan.

As I have said all along, sometimes managed funds are worth their fees, sometimes they are not. The threads you come on, you do not indicate this, you just say "You should not have a managed fund because fees aren't worth it" etc. and now say that you don't have any tracker funds.....

Lokolo

darkpool wrote: »

yeah fair enough, but i consider this type of forum like a conversation down the pub. it starts of somewhere and takes a million twists and turns.

anyway, if it hadn't turned into a fund manager/ fee argument it would probably have died after 10 responses.

And if the OP wanted anymore help he could have asked, hence my post saying "If you need any help, ask lots of questions!". The number of posters that complain because threads get derailed is outstanding.

darkpool

Lokolo wrote: »

But it doesn't matter to me, I am not picking a fund out of a hat am I? If I was then yes, your argument with the statistics would be sound. But I am not picking out of a hat, I am picking one which suits my needs. I don't think to myself oh I want a UK equity fund, lets have a looky, put all the names in a hat, oh ok this one will do.

Right. I doubt it would help me become an MSE hero, because I already am.

Yes.

OK which is fine, I am in agreement with you. But at no point during these threads have you said "Oh well sometimes a managed fund is worth the fees". You constantly say "I R NEVER PAY 3% MORE BECAUSE IT'S A WASTE OF MONEY." and leave it at that, then post a few articles you found from Google, then moan and moan.

As I have said all along, sometimes managed funds are worth their fees, sometimes they are not. The threads you come on, you do not indicate this, you just say "You should not have a managed fund because fees aren't worth it" etc. and now say that you don't have any tracker funds.....

yes, you are picking a fund out of a hat. there is no evidence that says that a fund that has done well in the past will do well in the future.

sorry, make that a god. you'd be an MSE god if you got the academic evidence that proved fund managers delivered the goods.

I've said before that UTs might be ok if you wanted exposure to a specific area. but are crazy for a generalist UT. Is it really not up to the fund industry to prove that the 3% fees are worth it? You not think someone going into an IFA with a 100k should be told what they will be getting for the 30k in fees they will be paying the fund management industry over the next 10 years?

If you invest directly in shares you get virtually no dealing fees and are not buying the low free float shares in the UK.

Lokolo

darkpool wrote: »

yes, you are picking a fund out of a hat. there is no evidence that says that a fund that has done well in the past will do well in the future.

No! I am not picking a fund based on past performance! Yes I will look at past performance but it won't decide anything for me. I am looking at the fund objectives and where it is invested (geographically and asset based), then I will look at performance compared to benchmark. I thought my Pizza example made it clear.

sorry, make that a god. you'd be an MSE god if you got the academic evidence that proved fund managers delivered the goods.

Better

I've said before that UTs might be ok if you wanted exposure to a specific area. but are crazy for a generalist UT. Is it really not up to the fund industry to prove that the 3% fees are worth it? You not think someone going into an IFA with a 100k should be told what they will be getting for the 30k in fees they will be paying the fund management industry over the next 10 years?

So say that from the beginning!

And of course the person should know where their fees are going, and I am pretty sure they are told, hence why this thread first existed.

When RDR comes into practice it will become more clear cut about where the moneys going as well.

If you invest directly in shares you get virtually no dealing fees and are not buying the low free float shares in the UK.

I assume you are talking about someone with a large amount of money compared to someone with £1-5k. Because investing directly in shares does not have "virtually no fees."

I am not arguing anymore on this thread I'd rather just let it die.