QUILTER CHEVIOT WEALTH MANAGEMENT, OR LACK OF?

Albermarle

All benchmarks are just arbitrary figures, not written in blood .
In my experience most investment funds claim to beat their benchmark, but I just presume the benchmark is inaccurate or inappropriate.

They can complain to who they like, but it almost certainly will not come to anything.

Like all customers, they have the choice to go somewhere else though.

Thrugelmir

Albermarle said:

In my experience most investment funds claim to beat their benchmark, but I just presume the benchmark is inaccurate or inappropriate.

Vanguard don't benchmark their VLS range as there'll no comparable index. Yet no one call these funds actively managed and they are extremely popular with less experienced investors.

End of the day no one is right all the time. "Lies, damned lies, and statistics" 

gm0

In my limited experience when someone is selling you something the comparator chosen by the sales person is carefully selected but not necessarily for clarity in you making the best decision for you.

This can be a via a variety of different strategies some legitimate - some sharper practice.

The most obvious is just obfuscation - selling a product or fund which is not benchmarked or is but against an index which is in fact little used by others.  Essentially the fund is the implementation of the index investment strategy i.e. the selected portfolio more or less and deviates only a little via say extra stock lending income (look how well it's doing vs its benchmark huzzah) or a small tracking error due to missing holdings at the edges (look it varies a bit - this is real).  The added value of such a niche benchmark is dubious compared to a major total return index from FTSE or similar. 

Next up is presenting a comparison of the "to be sold" not great value fund against confected alternatives such as a notional index tracking fund in the same markets and asset classes - let us say equities and global developed as an example.  But then slugging the comparator net fees returns with a "typical retail fees" number which is in fact the *maximum* that could be found or indeed imagined for a fund of that sort.  i.e. not a genuine net fees position for a real fund of that type that someone would actually sensibly buy with lower drag options available from mainstream providers.  Compound up that extra drag and the underperformance disappears as the other line is dragged down. Lovely big graph. But stick the assumptions over the page in a small font annex surrounded with dull T&C

Even worse - malpractice arguably - would be varying the assumptions around platform, incidental, trading, bundled and unbundled fees so they are *inconsistent* (due to our unique product structure naturally) - on the different product data series being compared to create something graphical which is "literally" true (within its own assumptions) yet also simultaneously actively misleading.

Remember kids - if you can't move your own line up - then you can always move the other one down - or change the scales and time periods selected to suit the goals of the presentation.

Anyone who dares tell me all this has never happened in the history of retail financial services sales - bravo - but I have a large hat and a knife and fork on standby.

Thrugelmir

Benchmarks are man made creations. MSCi is owned by Morgan Stanley unsurprisingly. As an investment bank looking to make a profit. They’ll create an index for whatever their client wishes to market.  If a fund manager deviates from available indexes. Then there is no comparables. Other than performance over an extended period of time. 

Malthusian

dunstonh said:

The IFA would likely have prevented all this as the job of the adviser is suitability of the investments to the investor.

And to disabuse investors of notions like "using a DFM generates free money because they will beat the market by more than the fee I pay them". If they are any good.

bostonerimus

Fatinvestor said:

Hi again. 

As an update I spoke with a couple of my friends and they informed me of the following:

Apparently the benchmark indices used by Quilter for my friends portfolios are 1) The MSCI PIMFA Private Investor Growth and 2) The MSCI PIMFA Private Investor Balanced. Over a 5 year period Quliter are now underperforming compared to those benchmarks on both a gross and net (of fees) basis. In my book that is underperforming. Yes, investment portfolios rise and fall, but what my friends are upset about is Quliter long term relative under performance. They are not a witchhunt; they just want to hold quilter to account as they respond to complaints with a whole host of selective vague responses, but then accept no responsibility for any under performance. 

Post Quliter not upholding any of my friends' complaints can they then turn to the Financial Ombudsman? Two friends used to have an Independent Financial Adviser but got rid of her and decided to deal with Quilter directly as it was a bit cheaper to do so. Mind you, Quliter never advised them that they would be better off finding a new IFA.

After looking at the Cheviot Quilter website I'm assuming that your friends have some sort of "off the rack" portfolio made up of Cheviot Quilter actively managed funds. If so then it's just a case of "caveat emptor" if they don't like the results. They can always move their money. It might be that Cheviot Quilter aren't actually doing that badly, without some numbers it's hard to gauge. There are plenty of dogs around in the actively managed world and you need to be careful with your money and try to avoid them. Even in extreme cases like Woodford I have little sympathy for the investors as the potential issues were easy to see and they did not do their due diligence. Sometimes there is fraud, like in the case of Bernie Madoff or London Capital and Finance and then their is a case to be made for compensation. But choosing a bad fund or having some bad luck and losing money is just par for the course.

Fatinvestor

Hear what is said by Boston above, but the comments are wide of the mark. It seems there's more to this than meets the eye and that's not the fault of Boston or others.

My friend's aren't idiots and are being well advised by lawyers re their options moving forward. They just asked me to go onto this forum just to see if there were any other folk who have been having a poor, or bad, experience with Quilter Cheviot. Maybe none of their clients use this forum.

Albermarle

to see if there were any other folk who have been having a poor, or bad, experience with Quilter Cheviot. Maybe none of their clients use this forum.

Their name is mentioned from time to time, but as with most wealth management type firms, the usual comment is how high the charges are.

My friend's aren't idiots and are being well advised by lawyers re their options moving forward.

I am sure many of would  be very interested in hearing the outcome, when it is clear. Although I suspect the only winners will be the lawyers wallets.

dunstonh

My friend's aren't idiots and are being well advised by lawyers re their options moving forward. They just asked me to go onto this forum just to see if there were any other folk who have been having a poor, or bad, experience with Quilter Cheviot. Maybe none of their clients use this forum.

Why would lawyers be involved?    Or is it one of these claims management companies that attempt to put in complaints willy nilly (usually using the FOS)?
If your friends are using lawyers then I suspect they are not as clever as you think.   

I haven't used QC but I am aware of them and there appears to be nothing wrong with their offering in terms of what they do and how they do it.   I wouldn't use them but that is me.

Fatinvestor

Albermarle said:

to see if there were any other folk who have been having a poor, or bad, experience with Quilter Cheviot. Maybe none of their clients use this forum.

Their name is mentioned from time to time, but as with most wealth management type firms, the usual comment is how high the charges are.

My friend's aren't idiots and are being well advised by lawyers re their options moving forward.

I am sure many of would  be very interested in hearing the outcome, when it is clear. Although I suspect the only winners will be the lawyers wallets.

Will do my best to inform you re the outcome subject to my friends' approval, and thanks.

The lawyer is related to one of my friends so comes at no charge.