by Nick Britton
If you’re a customer of Thameslink or Northern Rail, you’ll have spent much of the last few weeks waiting on platforms.
In the world of investment companies, we’re still waiting on platforms. Waiting on them to make investment companies available, accessible and easy to use.
A casual observer might think that the battle had largely been won. After all, investment companies are now available on 17 out of 19 major adviser platforms – and this should (in theory) soon be 17 out of 18 as Cofunds is subsumed into Aegon.
But availability is just the beginning. Olives in jars are available in my local supermarket, but I can never find them – just the more expensive marinated olives in plastic containers. (Now I think of it, this is probably entirely deliberate on the part of the supermarket, but I’m straying off-topic.)
If the goal of platforms is to make life easy for their adviser clients to offer an unrestricted investment choice, they are not there yet, according to the latest report from platform wizards, the lang cat.
The AIC commissioned this report because we kept hearing from advisers that their platform was a barrier to their using investment companies, and we wanted to understand better what was going on.
The report, which you can read here, shows that the cost structures of many platforms are set up in such a way that investment companies (and ETFs, for that matter) are more expensive to use than open-ended funds.
The good news is that ‘many’ does not mean ‘all’. There are platforms on which it is cost-effective and easy to use investment companies. Unfortunately the bulk of assets of advised clients are not sitting on those platforms, but on the platforms that make it difficult to use investment companies.
What can Spotlight readers take from this? First, considering platform costs is important to maximise the benefits you get from using investment companies. Previous research we did with the lang cat (log-in required) provides a full breakdown of the costs involved in using investment companies on 19 major adviser platforms. Of course, cost isn’t everything, but since prices for custody, trading and rebalancing can vary considerably, it’s something to think about.
Second, if you’re not happy with some aspect of the way your platform handles investment companies, why not tell them? We can moan all we like but the people that platforms will really listen to are their customers.
From waiting on platforms, to waiting on Brexit. Though the long-awaited 'crunch' moment appeared to have come with the Chequers agreement, several resignations later the politics of the situation are as uncertain as ever. Investment company managers, though, have to see past the political theatre to the potential opportunities and risks for their investors. This month in Spotlight, we hear from Neil Hermon of Henderson Smaller Companies, Georgina Brittain of JPMorgan MidCap and Alastair Mundy of Temple Bar, among others. Meanwhile, our regular columnist Ian Cowie looks at how UK company valuations (and investment company discounts) have been impacted by the country’s decision to leave the EU.
Finally, we look at opportunities in the environmental sector, and ask portfolio managers whether they see green issues moving up or down the global political agenda.
If you haven’t yet signed up for one of our investment company seminars in Edinburgh, Guildford, Knutsford and Birmingham, then there is still time to do so. If you are nowhere near any of these places, apologies, and we will try to get to you soon.
And if the summer months leave you with opportunities to bolster your CPD record, don’t forget to visit our Learning Zone (log-in required).
We'll be back in September. Happy holidays!
Nick Britton, Head of Training, AIC
13 September AIC Seminar (Edinburgh)
9:30 – 12:30. Speakers: Hamish Baillie (Ruffer Investment Company), Matt Brett (BG Japan Trust), Paul Niven (F&C Investment Trust), Nick Britton (AIC).
11 October AIC Seminar (Guildford)
9:30 – 12:30. Speakers: James Hart (Witan Investment Trust), Sebastian Lyon (Personal Assets Trust), Jon Forster (Impax Environmental Markets), Nick Britton (AIC).
7 November AIC Seminar (Cheshire)
11:30 – 2:30. Speakers: Alex Crooke (Bankers Investment Trust), Judith McKenzie (Downing Strategic Micro-Cap Trust), Ross Teverson (Jupiter Emerging & Frontier Income), Nick Britton (AIC).
8 November AIC Seminar (Birmingham)
9:30 – 12:30. Speakers: Sam Cosh (European Assets Trust), Ben Rogoff (Polar Capital Technology Trust), Steve Tatters (Aurora Investment Trust), Nick Britton (AIC).
Some of the fund managers speaking at our autumn seminars