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Spoilt for choice?

07 March 2006 Angelo Coppola

I recently listened to Anthony John from IMS in London, who are the advisors to Stanlib International, who says that finding quality in a market that is over-supplied with products, is difficult.

Consider for example that the number of new products being launched, merged and or withdrawn is about 18% per annum, internationally.

So what about that client that you advised should be investing in one of the merged or discontinued funds? Does this reflect on your judgment skills?

He also warned that advisers can make a simple mistake and loose their clients money in one fell swoop. He cited the UK market and the fact that last year the difference between the best and worst fund managers returns in any of the major asset classes was at least 100%.

Can you imagine telling a client that you made a bad call last year, and lost their entire investment?

So what should advisors and investors be looking at? He maintains that some of the issues to be looked are geography, asset class, market capitalization, style, and stock levels. Style shifts are perhaps the biggest influencer in terms of returns.

But do investors have the time to look at all of these issues and how do fund managers do the research and make the selections. No.

At this point is it any wonder that I got tired? Not really, it simply put me into a state of limbo I dont want to invest anywhere or in any thing, because of the all the inherent risks.

On the other hand I have commitments and present and future liabilities that need to be met. The bank rate is pointless, the flavour of the investing month could be anything, depending on who you listen too, and then to confuse me even more there is now a proliferation of third party funds coming to light.

Quick Polls

QUESTION

Do you believe this is the toughest period for financial advice in many years?

ANSWER

Yes, it’s hard to navigate the challenges and difficult to adapt. I’m struggling.
No, I have managed to navigate the challenges and have adapted. I’m good.
50/50. I just feel like whether we like it or not, we have to ready ourselves for change… be resilient and scale for the future. It’s not about survival of the fittest anymore but survival of the quickest. We just have to move on with life.
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