Weekly Thoughts June 2010

I am always prepared to compare strategies and fund managers I use against other options out there.  I believe as an IFA (Independent Financial Advisor) it is my responsibility to do so.  And so it was that I was invited, after asking if I can attend, to a presentation hosted here in town by a large brokerage business that I must not name.  They advertise having large numbers of clients and huge amounts of assets under management.  [I believe that just makes each client more and more just a number in a filing cabinet.]  They do a lot of direct stock portfolio management and have their own stock brokers / asset managers at their local offices who also run their own listed unit trust funds.  They approached me and said I should bring my investments to them and I can retain the client-relationship.

 I came away seeing that they will provide and manage income for clients no better and if anything, less effectively that who I currently use and their unit trust funds lag in returns compared to the ones I use.  So why do they do it?  It is always the case of being able to keep a higher percentage of fund fees if you create your own funds.  Hence the proliferation of unit trust funds.  So no go for me.  But I’ll always continue to watch and compare, for your sake and mine.