It goes without saying that it has been an volatile time for investors since the turn of the year and the recent recovery poses new challenges and questions. There is a large disconnect between economic data and the performance of developed indices, particularly in the US, and this is causing confusion and nervousness among longer term investors. This article is not to provide our views on where we are heading next or even to analyse past performance, as we provide active SWA Capital investors with updates on our views and insights on a regular basis. This update will focus on a topic which we are extremely passionate about – are you accepting less?
Less for this particular article will focus on Communication and Performance.
On an alarmingly frequent basis we are presented with new clients who have become disillusioned with life under their existing adviser,DFM or wealth manager. We have been told that the professionals who are remunerated for managing their assets have not been in touch at all during what has been extreme market conditions fuelled by a high level of investor uncertainty. On top of this when we look under the bonnet of the investments, the relative performance is at best – very poor. Maybe the later poor relative performance is the reason for the former lack of communication – it is certainly possible.
Of course there are many advisers, DFM’s and wealth managers doing a great job but the concern with our recent findings tends to focus around larger managed propositions which are expensive and underperform. The main cause of irritation is that although we see many clients who have found themselves in this position, the funds and solutions they are invested in are home to many billions of client money. We are only seeing a tiny fraction of these clients and this is what has prompted the question, how many individuals are accepting less?
Our investors at SWA capital simply wouldn’t stand for it and the reason for this is that we are permanently accountable to our advice and underlying performance -so how are these larger propositions going under the radar?
So our advice if you think you may be in this position is as follows:
– Don’t just accept the value of your investments on the statement or the online portal – challenge it! Either yourself if your confident enough in your own knowledge or ask another professional for their view.
– Ask your adviser for a breakdown of performance over the period you have been invested, can this be compared to a benchmark or peers?
– Are you aware of your charges? Not just adviser charges, but your investment charges and platform or provider costs?
– Ask for an update on their market views and the strategy going forward
If you are able to get satisfactory answers to the above or similar then you may be on the right track. If not then you do not need to accept less!