Vanguard accuses advisers of gambling with clients' money

Vanguard accuses advisers of gambling with clients' money

Advisers who adjust their clients portfolios because of political events are taking wagers on things they cannot control, Vanguard’s Ankul Daga has said.

Speaking at the Chartered Institute for Securities and Investment’s financial planning conference in Newport, the senior investment strategist discouraged advisers from worrying too much about political events.

He said: “Making portfolio changes in the face of political events is like taking wagers on events you cannot control.

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“Constantly tweaking and changing a portfolio is a complete waste of time and of the client’s money.”

He said advisers should worry about things they can control, such as the diversification of the portfolio, particularly on a global basis.

Mr Daga was speaking as part of a panel of investment experts at the CISI conference.

Marcus Brookes, head of multi-manager at Schroders, said he felt that with the German election out of the way the focus would shift away from political events.

He said: “The idea that populism would roll into 2017 has proved quite unfounded. The last big political thing was the German election.

“The real big thing is back to central banks and to Janet Yellen saying she will end quantitative easing.”

Meanwhile David Coombs, head of multi-asset investments at Rathbones, said it was important advisers kept their clients in liquid assets because of the risk of a second referendum on Britain’s membership of the European Union.

He said: “I have put a probability of 40 per cent on a second referendum. That could have a significant impact on sterling.”

He said this was because of the loss of the Conservative majority in this year’s general election and the fact the House of Commons is “remain biased”.

Mr Coombs added: “That will make sterling even more volatile and could lead to a recession in the UK driven by inflation, and the Bank of England being so far behind the curve.

“Mark Carney has lost all credibility and that’s a big worry.”