Retail Distribution Review (DDR)

gadgetmind

dunstonh wrote: »

OEICs have a lot going for them. Single pricing, no varying NAV to be concerned with, no gearing, data levels published to a high quality etc.

And, as you say, ITs also have a lot going for them. The ability to gear, the ability to retain a dividend reserve, the fact that they don't have to sell underlying assets at a loss then the hot money runs for the exits, and much more. They are also improving (voluntarily and otherwise!) regards frequency of portfolio reporting.

I'd never use an open-ended fund for something as illiquid as property. I would avoid (currently) using a close-ended fund to hold "fashionable" assets such as bonds and high-yield equities as many are on premiums(*). I would never use either to invest in well-understood developed world equity markets and instead use trackers. For markets even closer to home, I'm happy to hold a wide spread of directly-held equities.

Horses for courses, which it's why it's rather a shame that many (not all!) IFAs are still one trick ponies.

Who'll lose most between fund managers and platforms - that's hard to call. All I know is that they'll be fighting over rather meager scraps from my table as I like to keep the meat for myself. I don't think the number of platforms is excessive, but the number of funds is crazy to my eyes. I guess we'll need to wait and see.

Every area of business goes through a stage of disintermediation (love that word!) and the long-term winners are always those that *really* add value.

(*) - In the last week, I have bought more RIT, Ruffer and Personal Assets, but they are all either trading close to NAV or at tempting discounts.

dunstonh

Horses for courses, which it's why it's rather a shame that many (not all!) IFAs are still one trick ponies.

The problem is that recommending ITs to non-servicing clients with limited investment knowledge could easily end up in a complaint situation. With have a regulator that things consumers are stupid and a liberal FOS who couldnt believe consumer would tell lies for personal gain and that they are low IQ and cautious unless really obvious otherwise. In that situation, if you were giving advice, what would you do? (especailly, like many IFAs, you are financially responsible for that advice?)

gadgetmind

dunstonh wrote: »

The problem is that recommending ITs to non-servicing clients with limited investment knowledge could easily end up in a complaint situation.

Don't you think that will charge? Lots of the major investment companies seem to think so, and there is a flurry of take overs and renaming of ITs in preparation. I recently took small positions in a few of these (BRIG, SREI, etc.) in anticipation of discounts closing as new money was steered into them.

In that situation, if you were giving advice, what would you do? (especailly, like many IFAs, you are financially responsible for that advice?)

<future subjunctive mood>
Were I in that position, I would do as I'd always done before, which would be to recommend whatever made me the most money while also avoiding as many negative repercussions as possible.
</future subjunctive mood>

Whether that's better for the majority of investors in the majority of cases is something on which I'd prefer not to speculate.

that they are low IQ and cautious unless really obvious otherwise

I met an IFA a year of so back (the one I mentioned before who's doing loans to property developers using pooled SIPPs) and in the intro pack were forms for me to complete to confirm both HNWI status and that I was prepared to accept a high degree of risk. I guess that's one way of doing it!

I'm going to keep googling the name of the company every six months or so ...

dunstonh

I met an IFA a year of so back (the one I mentioned before who's doing loans to property developers using pooled SIPPs) and in the intro pack were forms for me to complete to confirm both HNWI status and that I was prepared to accept a high degree of risk. I guess that's one way of doing it!

If you meet that criteria then fair enough. If you dont meet that criteria (and most dont) then it is not. Especially if you didnt meet it but they tried to get you to sign it anyway. Just because you sign a form, does not mean you understood it (that is a common response to the signed form in complaints - it helps to read the FOS publications and I go to compliance meetings where they show us complaints and tell us the outcomes with a view to use knowing the problems/issues will help us avoid them)

Don't you think that will charge? Lots of the major investment companies seem to think so, and there is a flurry of take overs and renaming of ITs in preparation. I recently took small positions in a few of these (BRIG, SREI, etc.) in anticipation of discounts closing as new money was steered into them.

There will be an uptake in ITs. If you make something available that wasnt before to most then it is inevitable. There are clients who you will use them with.

Whether that's better for the majority of investors in the majority of cases is something on which I'd prefer not to speculate.

And that is where the mass market is.