Fund promos ‘as bad as tobacco ads’ – Chamberlain

Misleading and pointless

I completely agree with this comment from Chamberlain. For years, my clients (all within financial services) have expressed their concerns at the typical fund management advertisements. It’s misleading and just a completely pointless when sat next to a whopping, great big, caveat stating ‘Past performance is no guide to future performance’. Campaigns such as the ‘Profit Hunter’ driven by well known providers has the potential to create a false feeling of security which can be dangerous to an end investor who perhaps isn’t as investment savvy as a provider/fund manager might hope. A lot of challenges faced by Advisers includes the explanation to the end investor on how to dig through the outward messaging, including those positive graphs and bold statements. Just to ensure that, as an investor, they truly understand what might happen to their money if placed in one pot. As a marketer, from my point of view, it’s crucial that when my client is in-front of an investor that they have the best items of collateral that present all the options available to match their investors’ appetite for risk. Typically, these do not include graphs!

Posted by: Sarah Hooper

hmmmm

What a silly thing to say. Yes, fund managers quote performance. What else is there to differentiate between managers? Can it mislead the public? Yes, but only in hindsight. They are still making the best decision based on the information available at the time. This may come as a shock to someone like Simon, but know-one knows what markets will do in the future or how managers will perform. As for the arguement that managers are not able to provide positive returns, his view is a little simplistic. We've all had the tracker vs active arguments and I think again this can only be resolved in hindsight. Each decision (active or passive) must be made depending on the clients requirements. To close of either avenue is shocking. If this is his view he should be marching to Brussels and knocking down the EU's door. They are going to require all fund KFDs to carry a risk indicator, which will be created by analysing past performance. This is the major scandal, not fund managers promoting their success.

Posted by: GXR

Perhaps worse than tobacco ads

I absolutely agree with Chamberlain and Hooper above. GXR in his post appears to be the fund manager authority on silly things said. As such I suggest he re-examines his own post for both silliness and manipulative rubbish. I have yet to meet anyone outside the investment industry who understands fund performance reports and indeed many within the industry have little idea about much of what it all should mean. If public fund performance advertisements were outlawed I put it that that would be a beneficial to the public.

Posted by: CJ_51