Professional Finance people no better than amateurs

darkpool

there you go gadget, would you be jumping up and down to make that type of investment?

Thanks. All this is making sense. I've had a closer look at the illustration, and to be honest, I'm disappointed. Their assumed value after 15yrs at a growth of 4% is less than I could earn fixing it for just 5 years with the Halifax even after tax is taken off.

"I realise 4% might be considered conservative, but really, when I think about the growth that would be required to pay for the fees and offer the same return, my mind boggles. In short, for an investment of £70k at 4% I'd get back £81,500 after 15 years. When, really a clean (without charges) 4% growth yoy would be £126,000. Thats nearly £45k in charges? They'd be making four times as much as I am. Am I missing something here (maybe a few marbles?). And, assuming a higher growth level, they'd be taking a higher charge."

https://forums.moneysavingexpert.com/discussion/3788445=

gadgetmind

darkpool wrote: »

there you go gadget, would you be jumping up and down to make that type of investment?

I must admit that I dipped out of that thread fairly early on before it became clear it was an IFA.

No, it didn't look like a great option.

darkpool

yeah, not the sort of option that someone who had a good knowledge of investments would make.

i'm not saying it's bad advice, but it's certainly not particularly good advice.

dunstonh

but when you look at the advice IFAs give it doesn't seem particularly good. we saw the widow with 80k to invest, she was advised to buy some bond that had 3% annual charges.

That doesnt make it bad advice and the information supplied by her didnt necessarily indicate 3%.

maybe the system forces IFAs to make these recommendations, but the end result is still pretty poor investments for someone walking into an IFA office.

I am sure all the people that have Jupiter Merlin Income Portfolio or other FoFs with similar high charges but better than market performance are gutted they are getting higher returns.

If there were less IFAs on this forum spouting the "IFAs are brill" routine I would certainly be a lot less anti IFA

Have you considered that perhaps you are the problem?

but as it is i feel i'm doing a public service by acting as devil's advocate..

being a troll is not a public service.

a forum dominated by IFAs and a few well meaning people would not lead to a good website for advice.

This site has 4,000,000 members apprantly. You have identified that 7 of them may be IFAs. So, you view 0.0002% of the board members as domination?

Or do people seriously think they should trust everything to the IFA and have no background investment knowledge at all?

Compared to trusting you?

regarding stuff like the active/ tracker arguments, well i find it hard to believe that any reasonably intelligent person who has actually looked at the evidence could possibly believe that UTs deliver alpha returns on average.

How many times do you need to keep making that mistake and have it pointed out to you but you still ignore it.

darkpool

dunstonh wrote: »

That doesnt make it bad advice and the information supplied by her didnt necessarily indicate 3%.

I am sure all the people that have Jupiter Merlin Income Portfolio or other FoFs with similar high charges but better than market performance are gutted they are getting higher returns.

so what does the information she provided indicate is the equivalent annual charge she pays? i worked it out as 2.9% or something.

you make the argument that some people DIY while others get professionals in. but it seems when you go to an IFA you pay a professional fee and get recommended to buy investments that a reasonable informed private investor wouldn't buy.

Yes, yes well done, you managed to go onto trustnet and find some unit trusts that have done well. But what about all those UTs that have been dire?

I'd suggest anyone that agrees with dunstonhs "jupiter merlin has done well" argument buys themseve a copy of the financial times. there you will find 2 pages of share prices, but you will find about 8 pages of unit trust prices. it's really not surprising that some UTs will beat the market, but most don't.

dunstonh

but it seems when you go to an IFA you pay a professional fee and get recommended to buy investments that a reasonable informed private investor wouldn't buy.

Evidence?

Yes, yes well done, you managed to go onto trustnet and find some unit trusts that have done well.

When top selling funds that counter your argument are presented, you dismiss them. Yet you present no evidence and expect people to believe you.

it's really not surprising that some UTs will beat the market, but most don't.

if trackers typically come in mid table, then what do you think it above them and below them?

gadgetmind

dunstonh wrote: »

When top selling funds that counter your argument are presented, you dismiss them.

To be fair, that is a bit like showing someone all the dice you rolled that came up with sixes while conveniently ignoring all the others.

dunstonh

gadgetmind wrote: »

To be fair, that is a bit like showing someone all the dice you rolled that came up with sixes while conveniently ignoring all the others.

Doesnt that apply to any investment though?

You never know what the return is going to be whether your choice is 0.1% or 1%. You invest on the basis of potential. Whether your preference is 0.1% for just consistency at the mid table mark or 1% or higher for the potential to exceed that with the knowledge you may not, it doesnt matter. You make the decision on the basis of what you think is best for you and whether you think paying more for potentially greater returns is worth it. In some areas it is. In some areas it is not.

Lets give you just a choice of two things. A FTSE100 tracker or Jupiter Merlin Income portfolio (noting that neither would be my personal choice). If you had to pick one of those two, which would it be? I would pick Jupiter Merlin because the investment strategy offers greater potential for higher returns even though it costs more.

Why would someone pay 0.3% more to invest in the vanguard lifestyle funds rather than in the vanguard single sector trackers? Is it because they think they will make more out of it? No guarantee of that. It is an opinion. At what point do we say that that paying more for the potential of getting more is wrong.

I will repeat again as i have many many many times before. I use both trackers and managed. Sometimes portfolio funds, sometimes single sector. I like to use what I feel is best in each area of investment. My opinion is that some places a tracker makes sense, some places managed makes sense.

In some cases portfolio funds make sense. Not that they will ever be the best (as they rarely will be). But more that you cant do much damage in them and for some people, having investments that will never be best but never be worst and dont require the level of DIY ongoing monitoring, reviewing, rebalancing etc is better for that person.

gadgetmind

dunstonh wrote: »

Doesnt that apply to any investment though?

Yes, unless you avoid cherry-picking and look at the long term. I'm rather pleased with a lot of my stock picking, but I have some angry red scars on my portfolio that I choose *not* to ignore.

You make the decision on the basis of what you think is best for you and whether you think paying more for potentially greater returns is worth it.

Or rather whether paying more for potentially greater returns has been rigorously proven to be worth it.

In some areas it is. In some areas it is not.

There are only a few areas where I'd pay a little more for active management of equities, but I'm increasingly of the view that fixed interest is a bit of a minefield right now!

Lets give you just a choice of two things. A FTSE100 tracker or Jupiter Merlin Income portfolio (noting that neither would be my personal choice). If you had to pick one of those two, which would it be?

Shot or stabbed, come on, pick! I'd probably also go with the fund, but fortunately have many other options IRL.

Why would someone pay 0.3% more to invest in the vanguard lifestyle funds rather than in the vanguard single sector trackers?

Why indeed. I use a selection of Vanguard single sector trackers, partly because of the higher TER of LS, but also because I wanted a different sector and cap size mix, and because of the fixed interest issue. Of course, my own rebalancing will suffer from their dilution levies, which I guess the higher LS fee covers?

I use both trackers and managed.

Whereas the IFA I just gave the boot to wanted nothing to do with trackers.

In some cases portfolio funds make sense. Not that they will ever be the best (as they rarely will be). But more that you cant do much damage in them and for some people, having investments that will never be best but never be worst and dont require the level of DIY ongoing monitoring, reviewing, rebalancing etc is better for that person.

Monevator described the Vanguard LS trackers as "needing less maintenance than an Easter Island statue", which rather tickled me.

dunstonh

There you go darkpool. Gadgetmind has given a balanced response and you cannot argue any of it. It is his opinion and that is his strategy and he likes it. No name calling. No making up of things or ignoring points. That is how you debate.

it doesnt change my opinion in any way because I have my opinion and perception of investment potential vs cost and when I feel it is right to go tracker or managed. I also don't think we are that far different on the issue other than my willingness to consider managed funds more than he would on servicing cases where I am monitoring it more closely (The fact that Blackrock is the most used fund house by value of assets on my books - not including insurance contracts - confirms it)