What caught my eye this week.
Merryn Somerset-Webb was on good form this week writing about the FCA’s report [1] into the asset management industry. Opining in the Financial Times [2] [search result], Merryn laments all the talk in the FCA report of more, well, talk (or as the author’s call it, consultation).
Everyone’s favourite plummy personal finance punk has little truck for the industry’s excuses. For example, she writes:
My favourite part comes on page 84, where the FCA reports on conversations with stakeholders about the all-in fee. It turns out that several respondents were concerned about the “practical complexities” of an all-in fee. It’ll be hard to figure out transaction costs, they said. After all, trading costs “cannot be predicted accurately ahead of time”.
This is absolutely killing. A group of people who insist that it makes sense for us to pay them outrageously high annual fees on the basis that they are so good at complex forecasting — that they can look at, say, the 2,000 stocks listed in the UK and forecast which of them will do better than the others based on a pile of mostly made up spreadsheets — reckon there are insurmountable “complexities” in extrapolating what their own trading costs will be over a 12-month period from decades of their own data.
Hysterical.
Well put.
I’m a little weary of being indignant on behalf of investors who to often seem unable to do even an hour’s homework of their own, but Somerset-Webb is made of more noble stuff.
Keep fighting, she says in her article [2]. There is more work to be done!
From Monevator
I, Robot (or automatic investing for the people) – Monevator [3]
Investment platforms to be studied by the FCA on competition concerns – Monevator [1]
From the archive-ator: 7 ways to profit from other people’s folly – Monevator [4]
News
Note: Some links are Google search results – in PC/desktop view these enable you to click through to read the piece without being a paid subscriber.1 [5]
Britons’ savings rate at record lows, says ONS – Guardian [6]
Bank of England tightens mortgage affordability rules – Telegraph [7]
When not frightening fund managers, FCA also studying car loans market – Guardian [8]
Warren Buffett says the problem with the economy is people like him – CNBC [9]
“In practically all countries for which evidence is available, there is a clear link between what your parents earned and your own earnings prospects” – Bloomberg [10]
Products and services
Childcare: All the schemes, how they work, how to apply – Telegraph [11]
Property funds’ liquidity crisis lives on [Search result] – FT [12]
‘EU Pension’ planned for people who move between countries – Guardian [13]
A Help-To-Buy scheme case study in London – Guardian [14]
The Royal Mint is considering getting into the coin valuation business – ThisIsMoney [15]
Comment and opinion
Free yourself from your investments – Of Dollars and Data [16]
How many of Amazon’s dotcom peers from 2000 still exist today? – The Value Perspective [17]
Happy warriors and the practice of realistic optimism – Abnormal Returns [18]
Think hard before buying a London property [Search result] – FT [19]
No investor is fully passive – Morningstar [20]
Bills! – The Escape Artist [21]
[Some] investors have lost sight of the purpose of indexes – Bloomberg [22]
How to deploy £10m for financial freedom [“Forced” to read Monevator 🙁 ] – FireVLondon [23]
This time really is different [On the evolution of markets] – Bloomberg [24]
Larry Swedroe: Alpha’s persistence is always at risk – ETF.com [25]
An introduction to buy-to-let as an asset class – 7 Circles [26]
The pros and cons of doing buy-to-let as a Limited Company – ThisIsMoney [27]
Valuing Uber on a per user basis [Deep financial geekery!] – Musings on Markets [28]
The four Ls of retirement income planning – Retirement Researcher [29]
Off our beat
The power of the Rotten Tomatoes website – Wired [30]
How Twitter pornified politics – New York Times [31]
Orbituary for the great Doctor John Sarno [32] – New York Times [33]
And finally…
“Overall I thought this was a good book. It’s full of practical ideas with lots of detail on how to calculate the various ratios. However, you will need to have some experience with income statements, balance sheets and cash flow statements to get the most out of it.”
– John Kingham’s review [34] of How To Pick Quality Shares [35] by Phil Oakley
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- Note some articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”. [↩ [40]]