When you purchase a product in the supermarket the manufacturers are obliged to give a full list of ingredients. Not so the investment industry.
During a client’s review, she requested we ensure her investments were compliant with her strong ethical views. She had a substantial holding in a managed fund offered by a leading insurance company, a fund consisting of £2.25bn that the insurance company is merely managing for investors. The fund fact sheet lists the top 10 holdings and the percentage sector spread - standard stuff.
In accordance with this client’s wishes we needed a full list of the current underlying investments as perhaps one of the holdings was, say, an arms manufacturer. Though preferring to speak to the actual fund manager I ended up with one of the marketing team. I explained the background to my query and asked them to send me a full list of the underlying investments.
The answer was: “No”.
I argued that individual investors should have a right to know where the money that belongs to them was placed.
The answer was that it was not company policy. Arguments and counter arguments got me nowhere. The fund managers must know exactly where the money is placed so by pressing a button and with an email I, and the client, would know where her money was.
What occurred to me following this exercise is whether advisers really know where clients’ money is invested? Do we have the resources to conduct comprehensive research on each collective and monitor them to ensure that the managers are doing what it says on the packaging? I think not.
Gary Pashley
Director
GLD Associates
Cardiff
