Retail clients need assistance with their research and analysis and anything which clarifies and explains the much used managed funds must surely be a good thing. Not all clients purchase via advice and both assisted and self-fund selection are growing trends so this is surely really important.
Managed sectors
The ABI went some way to clarifying the situation with their mixed investment labels accompanied by a statement of how much each type of fund can hold in equities and the IMA had an opportunity to build further on this as the association actually representing fund management groups.
The proposed ABCD approach from the IMA appears to leave lots of scope for confusion and their stated assertion that ABC does not equate to Active, Balanced and Cautious seems disingenuous at best as retail investors will surely make the connection, either consciously or subconsciously.
I also take some personal umbrage with the comments from IMA Chief Executive Richard Saunders, currently prominent on the IMA website, that advisers and wealth managers ‘should be expected to do their homework’.
Wrong target
This is extremely patronising. Does he really think that those of us on the buy side just choose funds based upon a label? The standards of due diligence we and any other fund buying company I know are of an extremely high and detailed standard. Manager interviews, fund and sector metrics, peer group comparisons, detailed analysis of holdings and a multitude of other indicators are scrutinised before we ever get close to deciding to put our clients’ hard earned capital into a fund. To begin to criticise the highly client-centric advisory community to deflect the criticism the IMA is attracting is, in my opinion, just wrong.
So in my opinion the IMA have managed a bit of a feat here. They have managed to miss a great opportunity to clarify the situation and have actually increased opacity and the opportunity for investor confusion by not giving a straightforward steer on the composition of managed funds. Further, they have managed to insult fund buyers by instructing us to do our homework as if we stick our fingers in the wind or just read the marketing blurb in the Sunday finance pages.
Perhaps some self-reflection and a bit of homework at the IMA wouldn’t go amiss.
