Wealth manager Q&A with Ben Kumar: ‘Don’t doomscroll your savings’

7IM’s Ben Kumar has witnessed the rise and rise of index investing, is both curious and annoyed by bitcoin and warns of the dangers of checking your savings account on a daily basis

Ben Kumar
3 minutes

Q: What’s the biggest change you’ve seen in the industry since you joined?

The rise of index investing. When I started in 2011, most money was managed actively. But that year, Vanguard came to town. Cue a price war in passive, and a tough decade or so for stockpickers.

No Amazon/Apple/Tesla? No luck.

The mindset has completely shifted. Now, the default in most people’s minds is to be in an index – and moving away from that has a much higher bar. To be fair, Warren Buffett has been saying “just buy the index” for decades. The world finally listened.

Of course, that’s now led to suggestions that the pendulum has swung too far (one academic paper claimed it was “worse than Marxism”, which feels a little punchy). But I think what it’s doing is squeezing inferior and expensive active managers out of the market. Active isn’t going away – the world is too full of people looking to make money and to take risks, and to bet they know something someone else doesn’t – it might even get a little better once the field has cleared.

Q: What is the investment topic most often brought up by clients/investors?

Bloody bitcoin. It’s extremely aligned to massive rallies in crypto, which seem to happen every couple of years. But each time it does, we get asked whether we’ll invest. And usually there’s no more depth to the conversation than “it’s gone up a lot” with a side order of “my friend/colleague/personal trainer bought some years ago and now they live in Dubai”. It’s exhausting.

Personally I think the crypto experiment is super interesting (I have a little bit of bitcoin and Ethereum), and watching financial history repeat itself at warp speed is often quite funny. But it ain’t going into portfolios, no matter what Donald Trump is tweeting.

Q: What piece of regulation has had the biggest impact on your day-to-day role?

When you write a lot of articles about stocks and history you have to discuss the past. This means coming into contact with COBS 4.6, the regulation that talks about presenting past performance, and all the disclaimers around doing that. I understand the regulation, but is there any other regulation which is followed to the letter, but not the spirit?

See also: Mike Riddell on bonds: Panto-modium in 2025

Almost everyone in the industry talks about and uses past performance as a way to help judge future performance (in direct contrast to the regulation). After all, what else is there to look at; if I rock up and don’t talk about past performance, people will think I’m hiding something.

Q: What single change would you make to the wealth management industry?

I would love to unwind one particular bit of technological process – the ability of clients to check their account on a daily basis. Behaviourally, it’s a terrible thing to do: doomscrolling your own savings.

On a daily basis, markets go down roughly as much as they go up. And as we’re all a bit averse to losses, the down days are more painful than the up days. So if you check daily, you are going to make yourself unhappy.

My mum does it right. She set up her savings and investment plan 13 years ago, immediately forgot the password and then moved on with her life. She checked it during Covid (when she found the password during a clear-out) and was over the moon. Let the investments roll up over time and everyone will be happier.

Read the rest of this article in the January issue of Portfolio Adviser magazine