Big Firms

I have said it before – there are big problems with using big firms to manage your money, compared to dynamic smaller ones. The bigger you become, the harder it is to do anything other than buying the same stuff that everyone else buys and you have to ignore the great opportunities which exist as you would struggle to buy enough and then would struggle to sell when it is time to move-on. Head of Barclays Wealth has at last been honest about this and has noted that they cannot and will not use Investment Trusts for example, an investment format which we support significantly because of the better opportunities they present so often, the ‘closed-end’ nature of the funds and the benefits this gives the managers to be longer-term, the ability to gear-up and the often lower costs. (Crucially, this freedom benefits our clients! How much? The odd percent each and every year if not much more and investors worry excessively about what charges they are paying?).

Barclays Wealth manages £15billion in active funds but it is yet another reason why more and more managers and advisers are pushing their clients into ‘index trackers’ (passives) and disengaged funds. The man says that excluding whole rafts of great investments ‘is in their clients’ best interests’. Sorry but this investment manager and all his pleased, long-term clients have to disagree – with the results to prove it.

However you look at this, it’s a poor show (even before considering the valuation bubble in the same ‘stuff’ so that at some point a collapse will arise, as they all clamour for the door at the very same time as all the rest of them). Managing our clients’ underlying investments takes time and effort and yes, often we have to deal in particular ways to optimise the value and keep costs as low as possible for clients but that is part of our job, we do that well and it is hard work often too. Even with new money, we don’t simply throw it at the markets that day either for example, as all the rest do – we are careful as to what we buy and when and the same when it comes to exit, according to the client’s need.