Friday, 5 February 2016

another spin of the dice?


I've been challenged to one of those weekend warrior step count things again this weekend.

I'll probably accept.

I seem to use metrics for quite a few things, although the main ones I publish on this blog usually relate to my cycling. As an example, today I cycled 20.3 miles.

A few recent conversations mean I'll be taking a closer look at some of my more financial metrics too.

Talking with a mix of friends and relatives over the last month or so indicate that it is an area that many of us neglect. Not the day-to-day bills so much, but more what the financial institutions are doing (or not doing) with our savings.

In my own case I wrote to one of the financial providers supposedly investing my money. It was part way through last year and although they charged me a regular fee for the 'management' of my investments, they somehow managed to lose quite a lot of the money. Something similar happened once previously when I had money stashed in an Equitable Life scheme that tanked.

This recent well-known organisation replied with some kind of standard letter about market volatility, but it just reinforced my view that there's still a lot of cavalier fee-chasers operating the accounts of people like me in the financial markets. Tellingly, the well-known original company (with ethical Quaker origins) had been taken over/renamed by another well-known company and then later that had been taken over by a third well-known company. Try finding the right part of their online system. I also noticed that recent written communication from the now de-mutualised organisation are now from offshore.

What also got me at the time was that they didn't bother to send me any notice of their poor performance other than an annual statement. I'm sure there's many other folk in a similar situation who don't even realise what has been happening.

I was drinking with a friend of mine who is pretty smart at all of this stuff, but he's also been zapped out of money through an opaque managed fund, and a different friend took IFA advice to put money into some funds that are suspiciously tax free when the money gets released in about couple of years. He feels a bit trapped into something that seems to be more like a sealed unit where he doesn't really know what is going on.

Someone else told me about an investment model which was causing them a few hiccups, and when I glanced at it on-line, the mechanics of the way the thing worked and what was in it were completely hidden. It reminded me of the section in The Big Short where no-one knew what was in the sub-prime housing funds.

Back to my storyline. It seems to be that these generally switched-on people are letting someone else do the work (i.e. through the payment of fees) but in practice the end result isn't particularly good. Not payment for resultant performance as much as payment for desultory performance. We all know the current economic climate remains poor because of all the prior banking mishaps and the losses are now running downhill.

The reality is that many people in regular employment have these types of situations, whether it is through savings in ISAs or investments towards pensions or similar.

I feel another metric in the pipeline.

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