Financial Industry think their clients are "muppets"?

dunstonh

Why have posts been removed? Obscene language?

The usual targeted abuse I suspect. I dindt report them but I could see why someone would.

it seems to me that whenever someone posts evidence that the fund management industry does not add value for consumers the IFAs response is to shout "troll". or they mention the names of a few funds that have done well.

Nobody posts troll in response to discussion or debate. They post troll because the poster is either abusive, posts unfounded allegations, ignores the debate to inflame others or just twists things said. The last thread where you had posts removed (not this one but another one) you were using selective copy and paste to change the meanings of what was being said. That is not debate. That is the activity of a troll.

or they mention the names of a few funds that have done well.

You have to highlight it can work in some areas. I dont think you have realised what you have said there as it just makes you look stupid. You are asking people to ignore the examples of where it works to prove that it cant work.

That is on top of your continued failure to not understand the difference between unit trust types and investment strategy. It's quite good as your signature highlights how bad your knowledge is. Its like a sign that says darkpool doesnt know what he is talking about.

The threat posed to your returns through high charges can be very dramatic. Research from Which? shows that if you invested £10,000 in a fund with no charges, and it grew by 6% annually for 20 years, you’d get a return of £32,071 – just over £22,000 growth.

If you invested in a fund with the industry average TER of 1.67%, your return would be reduced to £23,344 – meaning £9,000 of your growth goes on charges. If the TER was 2.5%, £12,000 would be paid out in charges. That’s not even factoring in the portfolio turnover rate costs.

What a particularly stupid thing to say (not you on this occasion but Which). It is saying that if there were no charges you would get £x but if you paid charges you would get less. Talk about stating the obvious. It doesnt even consider that you are not talking about like for like. If you use the same principle of what they are saying then if you pay 10p more for an orange than an apple then that means the orange must be a rip off and should be avoided at all cost.

Jegersmart

Good post Dunstonh - why do people frequent forums with a giant axe that needs grinding? Seems like waste of time imho.

J

p.s. why do these threads always go off topic? I am sure I saw that the OP wanted to dicuss broader issues regarding banking and financial institiutions......?

cloud_dog

darkpool wrote: »

fair enough, you will always get some people pulling a swift one. but how much money are you talking about for a corgi hour and some disks? 500 pounds? when did these things happen? recently or a few years back?

Boiler - Sept 2011, Car June 2009

darkpool wrote: »

how much does a fairly normal couple with 500k in investments pay in fees? maybe 10k a year? and for that 10k they don't seem to get much in return.....

Sorry but your logic is repulsive.

So its ok for people to try to rip others off it the amount in your eyes is relatively small? As a percentage of the transactions it was roughly double the cost.

So....... in the real world not ok!

Neverland

dunstonh wrote: »

It doesnt even consider that you are not talking about like for like. If you use the same principle of what they are saying then if you pay 10p more for an orange than an apple then that means the orange must be a rip off and should be avoided at all cost.

The orange is both more expensive and more likely to be rotten

Which?, again, this time on active fund management:

The fact of the matter is that not many fund managers manage to beat the stock market to which their investment selection is linked. For example, analysis of the UK All Companies sector at the end of 2010 showed that only 24% of actively managed funds managed to beat the benchmark stock market (the FTSE All Share) over the past decade.
So basically, there’s a 75% chance you could end up with a fund that is not delivering you the return you could get by simply tracking the index with a passive fund.
One of the biggest drags on this performance is costs. For the privilege of getting an expert fund manager, you have to pay much higher fees than a passive investment fund. The average total expense ratio (TER, or total annual cost of an actively managed fund) is 1.67%.


Read more: http://www.which.co.uk/money/savings-and-investments/guides/different-types-of-investment/active-vs-passive-investment/#ixzz1pfC2kBwE
Consumer Champions Which?
Under Creative Commons License: Attribution Non-Commercial

Lokolo

Neverland wrote: »

The orange is both more expensive and more likely to be rotten

Which is the case for the FTSE All Share. What about comparing funds in other areas such as Emerging Markets?

Data across the board would be a better comparison.

Jegersmart

what do all these replies have to do with the original post?

J

darkpool

dunstonh wrote: »

You have to highlight it can work in some areas. I dont think you have realised what you have said there as it just makes you look stupid. You are asking people to ignore the examples of where it works to prove that it cant work.

no one disputes that a few actively managed UTs do well, but the statistical evidence shows that is down to luck.

I could give you the names of people who have won the national lottery. would you accept that as "evidence" that the lottery is a good investment?

Neverland

Lokolo wrote: »

Which is the case for the FTSE All Share. What about comparing funds in other areas such as Emerging Markets?

Data across the board would be a better comparison.

I don't have any to hand (aka I can't be bothered to look), have you seen any?

Active management should work much better in inefficient markets like emerging markets, but the management charges and other costs on specialist funds tend to be much higher than average

Personally, after having shares in TEMIT and the F&C EMIT (RIP) I've now switched my emerging market investment over to an index tracker

dunstonh

The fact of the matter is that not many fund managers manage to beat the stock market to which their investment selection is linked. For example, analysis of the UK All Companies sector at the end of 2010 showed that only 24% of actively managed funds managed to beat the benchmark stock market (the FTSE All Share) over the past decade.
So basically, there’s a 75% chance you could end up with a fund that is not delivering you the return you could get by simply tracking the index with a passive fund.
One of the biggest drags on this performance is costs. For the privilege of getting an expert fund manager, you have to pay much higher fees than a passive investment fund. The average total expense ratio (TER, or total annual cost of an actively managed fund) is 1.67%.

That is wrong though. There is not a 75% chance. You would first eliminate the passive managed funds. They are a complete and utter waste of money and total cashcows for the firms that use them. Then you would eliminate the general UK Growth funds with virtually the same strategy as the FTSE all share as there is no point paying extra for something doing the same. Then you have a choice of what is left. If you want the all share strategy then you go tracker. If you want a different focus then you look at what is there.

darkpool

cloud_dog wrote: »

Boiler - Sept 2011, Car June 2009

Sorry but your logic is repulsive.

So its ok for people to try to rip others off it the amount in your eyes is relatively small? As a percentage of the transactions it was roughly double the cost.

So....... in the real world not ok!

ripping peole off is always wrong. but sometimes you can't sweat the small stuff.

like it or not an hour of a plumbers time is not a fortune (compared to someone paying 2% every single year on a 500k portfolio)