Hargreaves Lansdown Wealth 150

ToriP

I recently received some marketing in the post and have seen this online. What do people think of this wealth 150 choice of funds with regards to the choices and the content

The choices are from rigorous mathematical analysis...detailed assessment...talking to managers...

Vortigern

You used the word "marketing" and you're absolutely right. It's a list of the funds HL need to sell. Allegedly.

Sometimes they withdraw funds from this list due to poor performance, sometimes they include newly launched funds which have no track record.

dunstonh

What do people think of this wealth 150 choice of funds with regards to the choices and the content

The marketing 150 list that favours firms that have effectively paid to be on there (typically by offering lower terms)

http://www.thisismoney.co.uk/money/diyinvesting/article-2574668/How-pick-winning-fund-Hargreaves-reveals-research-Wealth-150.html

http://www.moneyobserver.com/news/15-01-2014/we-wont-pay-to-be-hl-wealth-150-says-fundsmiths-terry-smith

HL is an expensive platform (its a good platform but it is at the upper end of cost for most people). So, the more superclean classes it has, the more the fund houses are cross subsidising through the back door. e.g. platform charge is say 0.05% higher than typical but fund is 0.05% lower than clean. The fund houses cant pay commissions to the platforms any more so this is one way around it.

Having a fund on the wealth 150 increases distribution of that fund. The more restricted a distribution channel is, the more profitable.

colsten

ToriP wrote: »

The choices are from rigorous mathematical analysis

Rigorous mathematical analysis of the revenue and profit potential of HL, perhaps. Though not even that is sure - only thing you can be sure about is that the messages are from a Marketing Department.

They are appealing to people who find picking investments difficult as there is a bewildering choice if you don't know anything about investments. You could liken it to grooming investors, junior investor abuse.......

If you want to learn about investing, and how to pick the right investments for yourself, you need to read quite a bit. There is a thread somewhere on this forum with "recommended reading" but if you want a shortcut, go to http://monevator.com/category/investing/passive-investing-investing/

bowlhead99

I wrote this before but here's the copypasta:

150 highlighted fund choices out of 2000+ options is quite a restriction. They want to give people something more manageable to work with to avoid new punters being intimidated. Clearly if they are only putting a small sample of available funds in the list it will be due to their 'special relationships' with certain fund manager groups, whether explicitly paid for or not, and there is nothing about that which constitutes 'impartial advice' to an investor.

When funds went over to clean pricing and a large element of manager kickbacks ceased, they came up with a new 'Wealth 150 +' and when you click on the 150 link this little subset is what they give you as standard until you click the tab to reveal the rest of them . The 'plus' are a subset of the 150 and are the ones they really want to set you up with, generally they have negotiated slightly lower management fees or a semi-exclusive share class for their investors in exchange for a commitment or perception that they will promote the fund and drive a lot of subscriptions to the manager.

This is in their interests because the management fee discount helps to offset some of their very high platform charge and will tempt some investors to stay with them to access a heavily promoted fund at a discount rather than looking for cheaper platforms. Of course, instead of getting their 'exclusive' discount of 0.1% you could just change platforms and buy the fund at full price elsewhere with a 0.25% lower platform fee, which would suit you better. Or you could just pick a fund from the 2000+ that they don't promote which might actually give you better returns - such that the fee discount is dwarfed by the returns growing or preserving more of your wealth.

Long story short, it's just smoke and mirrors to make you more comfortable parting with your money - whether to steer you towards buying a specific fund or just feeling you are better informed to buy any fund at all. None of the funds they review will get a bad review - for which their excuse would be that they only select the best funds to bring to your attention

You can read about funds in lots of different places but the reality is they will generally not be impartial. Nobody is going to write impartial reviews on the full 2000 fund options unless they are getting paid to do that and consumers do not want to pay for reading things online so they will be funded by fund managers' advertisements or the marketing budgets of fund platforms themselves.

ToriP

Thanks for the replies. It does make for some informative reading but it'll be taken with a pinch of salt.

I don't suppose there is anyway of knowing what is the least partial source out there?

I've read a lot from the telegraph, thisismoney, monevator as they seem to come up readily via Google for my rather obvious searches. *

*Edit- oh and this forum!

masonic

ToriP wrote: »

I don't suppose there is anyway of knowing what is the least partial source out there?

Sites like Citywire and Trustnet give fund managers ratings, but even those look questionable sometimes when you scrutinise past performance. It is probably best to review information from a number of different sources to get a balanced view.

bowlhead99

You can look at trustnet.com - plenty of articles and editorial / advertorial so that is more informative reading for your whether or not it is actually impartial. Many of their themed articles will talk about multiple funds in the same sector. But sometimes will compare them over different cherry picked time periods or against different indices so that they are not necessarily saying one is worse than another. Still, when all the graphs are shown or lookup-able on the website, you can't hide from the results.

At the end of the day any article that has a discussion with a fund manager is going to try to show him in a good light or they will not get to interview him again; and any article where they have different managers or researchers from the plaftorms to give them a couple of soundbites about what top fund is on their watchlist or favoured for one reason or another, is going to be coloured by whatever spin that manager or analyst wants to give.

Some of the trustnet stuff is useful for a general (basic) insight into economics or some aspects of world markets, and the research data is at your fingertips; you can put together a basket of funds and easily compare them against each other, and if you use the classes that have been going for a long period you can get graphs going back 10-15 years and see how the funds did in the last couple of crashes which you'll never see on HL with its totally inadequate 5-year charts.

Some like the Investor's Chronicle as well, which has pieces on funds and investment trusts from time to time. Best to steer clear of their ideas on individual shares which is a sure way to lose your shirt by following a tip!

ToriP

Looks good.

Thanks for sharing wisdom :beer:

sorcerer

I find many of the articles on Trustnet and Morningstar are actually advertising for the fund. It's normally a fund manager writing about how great a certain area of invesments is, which just happens to be in the area of the fund which they manage. Don't get me wrong i still read them, buti I take their views with a pinch of salt TBH.


I prefer the opinon of indenpendent magazine journalists who don't have a vested interest in the fund. However you still have to be a bit carefull, for example Money Observer is now owend by Interactive Investor, so they are constanly going on about how great Interative Investor are as a platform. Although not a fund as such, II also push certain funds, albiet no where as bad as HL.