28 March 2012

Do you really need a 'lifestyle' offering from your banker?

Reading about Barclays' lifestyle offering for 'high net worth clients' one has to wonder if that is what will restore confidence among investors that suffered from a difficult and unrewarding investment climate during the past 10+ years. Would it not be better to concentrate on producing the best possible performance for the client's portfolios and save the money (and possibly reducing fees accordingly?)

Beware of selective performance statistics

The first quarter of 2012 is nearly over and it has been a good one for markets. Inevitably some fund managers (or better some of the funds in their product line up) have done well and are not slow in trumpeting their achievements. But investors should be careful when listening to the siren songs of marketers or investment advisers. A fund that did well over the past three months may not look so good when scrutinised over a one or three year period. Even when a fund passes muster over the longer periods there might be other - and larger - funds managed by the same firm or individual that can show at best a mediocre performance. That leaves the poor investor still with the difficult (impossible?) choice of picking the right fund.

24 March 2012

Use fee-based adviser and liquid products

Recommends William Baldwin (Forbes).

18 March 2012

Don't be a Muppet when dealing with financial advice

The revelation claiming that some employees of Goldman Sachs occasionally referred to customers as 'muppets' should be a reminder that the old adage 'Buyer Beware' should always be foremost in investor's minds when confronted with financial advice. In nearly all situations the vendors have a financial interest at stake and the inherent conflicts of interest can only be neutralised by a careful analysis of the service on offer. Most investors are at a disadvantage as they do not have the same level of information about the intricacies of the financial markets that is available to finance professionals. Taking unbiased advice is recommended in order not to become just another muppet. For more on the subject read here. The distinction between a client and a counterparty should be of particular interest to private investors.