Understand Your Investment Costs
Fund manager Neil Woodford criticised his industry for over-charging customers and paying managers too much. Reading this recent BBC News article, I couldn’t help but think ‘surprise, surprise!” This is just not new news- I’ve been going on about this for as long as I can remember!
The article reminds me of an excellent book I read by Fred Schwed Jr. “Where Are the Customers’ Yachts?” Written in 1955, the book refers to a story about a visitor in New York admiring the yachts of Wall Street’s bankers and brokers. He naively asked where all the customers’ yachts were, but of course, none of the customers could afford these yachts.
The customer deserves the return the market delivers for taking the risk. Instead, fund managers are charging too much for risking other people’s money.
My advice to you is to make sure you understand the total cost of investing, not just what you’re paying your adviser.
If you are uncertain at all about the true costs of your investment portfolio, or how much you’re really being charged, call in for a cup of coffee and a free second opinion. No obligation, no cost. You could even take my observations back to your current adviser.