I’m happy to admit I fit neatly into the age demographic of today’s average financial adviser, which is about the same as that of most Radio Two presenters.
Most of us started out as tied agents, telling our clients that the one-size-fits-all Managed Fund, which was all we had to offer, was a better home for their savings than the boring building society.
When we all became proper IFAs, like the proverbial kids in the sweetie shop, we combed Trustnet (other more expensive services are available) and put together fab portfolios for our clients.
We could recommend any fund in the known universe, could pick the best performers and make our clients’ fortunes. And all those fund launches we were invited to!
In one month in 2007, I remember at least four new ‘novelty’ property funds of different varieties being plugged in the same ghastly hotel - none of which exist today.
Like a new dad finally realising that his own dad might have known what he was talking about, I’ve concluded that boring is, more often than not, bestPicking and recommending lots of funds was, of course, the easy bit. The going got rather tougher when we had to go back to see those same clients in a year or two, when many of those best performers had bombed.
It meant both hours of extra prep and research and, often, a dose of humble pie. Then, in another year or two, the inevitable five or 10 yearly stock market and/or property crash would compound the problem.
But here’s the thing. Those clients from the old days whom we hadn’t got around to seeing, still stuck in those boring Managed Funds, had actually done just as well as the ones we’d put in our shiny new IFA selections.
They’d stayed invested in a mixed, multi-asset portfolio; no one had tried to be clever and switch them into or out of any flavours of the month (probably because no one had got around to it) and they were better of as result. Sounding familiar? Sounding like a full circle?
Like a new dad finally realising that his own dad might have known what he was talking about, I’ve concluded that boring is, more often than not, best.
I’m happy to tell clients that at least half of those paid a fortune to manage money in the City won’t, at any given time, have a clue what’s going on, so I don’t pretend to either. Look at how many hedge funds made big bets on remain. Shame.
The last couple of weeks have confirmed most of my revelatory wisdom. If you’d pulled your clients’ money out of the market in case of Brexit, they’d be worse off.
If you’d stuck your clients’ money in one of those top-performing property funds last year, they’d be worse off, If you’d left them in the Zurich/Aviva/Standard Life/Others-Are-Available Managed Fund, they’d have done OK and been quite happy to pay you your half-to-one-percent.
Yes, Radio Two plays some wacky music around the edges. But it pulls in the millions by playing the stuff we grew up with which is often the best. I’d say.
Philip Hanley is director and IFA for Philip James Financial Services
