James Coney  

Now is the time for a good financial adviser

James Coney

James Coney

So this is why good advisers will be highlighting to clients that, actually, this unexpected turbulence was planned for.

If active managers and financial advisers cannot prove their worth when the rest of the market is falling apart – then really there is no hope.

What is the point of AR funds?

I have never seen the attraction of absolute return funds: they are just too complicated.

I understand the philosophy, and in a way I understand what gives them a place in the market. But I am a simple fellow, so when I print off the full list of holdings for one fund, and discover it runs to 34 pages and includes baffling currency hedges and derivatives, then I just cannot stomach it.

Not only that performance has been dire – at least in some funds. The worst is down 36 per cent in a year.

That really is some achievement, even when you have got a fund pumped full of short positions, and particularly considering the objective of the strategy.

No, absolute return funds are an expensive mess. Not for me, thank you.

Problems with unit trusts

The turmoil in the market once again highlights the liquidity and pricing issues that are problematic with unit trusts.

Anyone who wanted to sell on the day the market crashed would have got the price 24 or even 36 hours later.

In a dynamic investment world, that really is not acceptable for some investors.

Some fund managers blame this misconception on the platforms for promoting easy trading.

But really, it highlights the lumbering pace of change in the unit trust world.

James Coney is money editor of The Times and The Sunday Times. @jimconey