Fund manager problems….as an investor are you really sure about what’s happening with your money?
Tuesday, 9 June 2009
Whilst most investors will not have heard of Keydata, the structured products provider has just gone into administration. Not good news for Keydata investors. There have also been problems at fund managers, Arch Cru… all of which means investors need to ask more questions. Let me explain.
Fund managers have seen funds under management fall and new business slow down. That means revenues have fallen and there is a need to cut overhead costs, reduce bonuses and staff to hopefully remain profitable. When cost cutting is under way, employees are facing lifestyle changes, so their motivations are questioned. Anyone would be the same in similar circumstances. Whilst the FSA seek to ensure investors funds are ring fenced, and at the time of writing, there still appears to be no clear indication of this protection for Keydata investors, the resultant anxiety and uncertainty of what action to take is difficult for investors. Keydata has tried to deliver what every investor wants, low risk with high returns. However, capital markets do not work that way.
At Murray Round, we do not have a policy of investing into structured products. Keydata was a structured products provider. As such our clients have no impact. Yet Keydata and its future, whatever that may be is not the issue, it is whether investors should use structured products from any provider. At present there are various providers looking to sell these plans by using investors’ fears as a driver to invest into what appears to be ‘safe’ investments in a volatile market. As an investor, ask yourself, are you absolutely sure of the risks? Do you fully understand how these products work? If you do not, do not invest. Providers such as Keydata have been successful at marketing to advisers, who in turn have sold these plans to investors, yet if we have learned nothing from the current crisis , it is do not invest into things you do not understand. The Banks did it and we all know the impact.
If you already have capital invested in these plans, perhaps when they mature, its time to really look into how to manage your wealth by assessing the risks thoroughly. The good news is that over time capital markets work and capitalism works, as an investor you need to ensure you secure part of that growth. Using a fee only independent wealth manager is likely to be your best chance of success.
posted by Murray Round Wealth Management @ 10:00,
The Authors
Nicholas Round
Nic is the Managing Director of Murray Round Wealth Management Limited, who seeks to ensure the advice provided is truly independent. Based in Shropshire with clients local, national and worldwide, Nic has strived to find the best possible service for his clients needs, by researching and studying the market, trends and philosophies. Nic strongly believes Asset Class Management will bring his clients Financial Freedom, Independence and Happiness.
Kirsty
Kirsty is our communication guru. Managing information requires considerable due diligence and her passion for organisation gives the clarity we all seek. From Shropshire, with a Psychology Degree and much travelling, she is now back in Shrewsbury...and London often, keeping us all at Murray Round focused.
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