Robin Powell`s “Sensible Investing TV” – A Documentary Worth Viewing

Published on: September 3, 2014
CategoriesDIY Investment, Financial Advice

The new documentary from Sensible Investing TV sets out to de-bunk the notion that, when it comes to investing, you get what you pay for.

Robin Powell`s new documentary – to be shown in ten short weekly instalments, is a must-view for anyone who takes long term investing seriously.

The  link to the first video follows:

… while those who might also appreciate additional background may be interested in the company`s News Release below:

How to Win the Loser’s Game

Part 1 of a new landmark documentary series from
Sensible is now online MEDIA RELEASE 3 September 2014

For immediate release

Most of what we see and hear about how to invest comes from
either the fund industry or the financial media – both of which
have their own agendas. This landmark documentary is an
attempt to redress the balance.

Nine months in the making, How to Win the Loser’s Game aims to
provide ordinary investors with the information they need to
achieve their investment goals. It explores the relative merits
of active and passive investing, as well as so-called “smart” beta
- a “middle way” approach that is gaining in popularity.

Among the contributors are some of the biggest names and
brightest minds in the investing world, from Vanguard founder
John Bogle to MoneyWeek editor Merryn Somerset Webb,

authors Charles Ellis and Larry Swedroe and Nobel Prize-

winning economists Eugene Fama and William Sharpe.


How to Win the Loser’s Game is being released in ten weekly,
stand-alone parts, on, followed – on
November 5th 2014 – by the full-length, 80-minute film.

Notes to editors: Sensible Investing does not sell or endorse any
particular investment products. Its aim is to promote the benefits of a
long-term, low-cost, low-maintenance and highly diversified
investment strategy. Based in Birmingham, England, it serves a
worldwide audience of investors, journalists, bloggers, academics and
investment professionals.


“The fund management industry as it stands is failing the
consumer. There are too many managers delivering consistently

poor returns while taking huge amounts out of people`s long-

term savings in charges. Investors need to wise up.
“We do recommend that investors use an adviser. But this
documentary will help them get started on the road to a
successful investment experience.”
Richard Wood, founder, Sensible

“We keep hearing from active fund managers that they can
beat the market. But only about 1% of them do so consistently,
and they’re almost impossible to identify in advance.
“How to Win the Loser’s Game presents hard evidence – tried,
tested and peer-reviewed – that there are better and far cheaper
ways to invest.”
Igors Alferovs, Barnett Ravenscroft Wealth Management

“As well as investors, this documentary is compulsory viewing
for journalists and politicians.
“It’s well known that we face a pensions crisis. The emphasis so
far has been on the need to put more more money into our
pensions. It’s true that most of us have to. But we also need to
wake up to how much the industry is taking out of our savings -
and how little value it’s adding in return.
“Investors – and the wider economy – would be better served by
a fund management industry 20% its current size.”
Robin Powell, producer, How to Win the Loser’s Game

More information is available from:
Robin Powell +44 (0)121 771 3382,

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A Response To “10 Reasons To Invest In Face-to-Face Advice Over Online” (Bryce Sanders – “Financial Adviser”)

Published on: February 6, 2014
CategoriesDIY Investment, Financial Advice

“Financial Adviser” today carried a piece by the President of Perceptive Business Solutions (below), to which Money Guidance felt compelled to respond.

In times when investment returns are low, reducing expenses can sometimes make the difference between profit and loss. A popular strategy to reduce costs is to eliminate the middleman, which is what makes online investing so appealing. But this approach will not eliminate the need for financial advisers, because investing big money involves face-to-face relationships.

Trading, investing and banking online offers convenience – people can access their account 24 hours a day. If a client has a question that requires a response from a live person, that is no problem – tiered service can reduce waiting times for an advisory firm’s best clients. Virtual investing might require upfront investment in technology, but it saves the expense of high street offices along with salaries and commissions for advisers based there.

Interacting online also has its drawbacks. Online dating is a good example where things are not what they seem, and few people would go online to get medical, legal or accounting advice. Online investing makes sense for people who know and understand what they are doing. It is an excellent vehicle for investors who want someone to follow instructions and execute trades.

But the role of the financial adviser is far from dead. When people part with large sums of money or make important decisions, they prefer to do so face-to-face – it is easier when the advice comes from someone who knows and cares about you. Consider the following 10 reasons why a face-to-face advisory relationship is superior to online investing:

1. People make judgments. Before accepting advice most investors want to size up the other party. In politics, countries’ leaders meet at summits and look one other in the eye. Former UK prime minister Margaret Thatcher famously said of her Soviet counterpart, Mikhail Gorbachev: “This is a person I can do business with.”

Why it is important: many people need to determine informally whether the adviser is knowledgeable and has their best interests at heart. You will need to meet them.

2. Bricks and mortar. Buildings imply stability and a commitment to the community. Investors like to see hard assets such as property. It makes them feel their assets are “secured”.

Why it is important: investors want to see a parent firm with deep pockets before they entrust their money to an adviser.

3. Longevity. Established firms in familiar surroundings communicate stability. Knowing that the adviser across the table has a long-term career with the firm puts clients at ease.

Why it is important: the adviser is the face of the firm in the community. They assume a long, successful career is built on doing the right thing for their clients year after year.

4. Referrals. People often refer their friends to a firm because they have had a good experience or got a good deal. Something might be on sale, but it is more likely people are referred to individuals who made a process go smoothly.

Why it is important: in property transactions, once a contract is signed the estate agent’s job is to keep the sale on track until it is completed. This is a people skill – estate agents often build their business on personal referrals.

5. Accountability. It is human nature to apportion blame when things go wrong. If someone has made a mistake, few investors want to say: “It’s my fault I lost money. I wasn’t paying attention.” In politics, world events and sport, we hold individuals accountable, rather than organisations.

Why it is important: clients are accepting advice from a person they expect to hold accountable for the results, based on the advice given.

6. Confidentiality.Many people feel data they enter on their computer might as well be displayed in lights in Piccadilly Circus for all to see. Regardless of a firm’s best efforts, systems get hacked and data gets stolen.

Why it is important: like the confessional, people assume details they tell their adviser in confidence stay that way. Although advisers maintain client contact records, they use some discretion in which details to include.

7. Avoiding misunderstandings. Meeting face-to-face allows investors to ask questions they might find difficult to word or are too embarrassed to ask online. The adviser can look for visual clues – is the client following what the adviser is saying? Advisers can read back an order so that a client understands what they are agreeing to.

Why it is important: each party can read the other’s facial expressions and probe with questions. Many marriages fail because of breakdowns in communication.

8. Relationships. Trust means a client being confident an adviser is working in the client’s best interests. Trust is the foundation of many personal relationships. Many clients befriend their advisers because of traits displayed during the investing relationship.

Why it is important: social people surround themselves with people they trust, often with skills that make their lives easier.

9. Consider the alternative. Investing online might save money in the short run, but what if the investor makes a mistake? The financial consequences of choosing bad investments or holding others for too long outweigh the savings from lower fees.

Why it is important: as people age, their number of peak earning years declines. The older the investor the less time they have to earn back losses from a poorly chosen investment. That is why they need advice.

10. Negotiation. Online investing is cheaper in the prospective investor’s eyes. Everyone still makes money, so it is important be aware of what you get and what you pay for each approach. The adviser’s fee structure is not fixed like train fares.

Why it is important: neither the online nor the face-to-face approach is a perfect fit for everyone. Working with an adviser has advantages. Discuss the cost in terms of the difference between the two alternatives – advisers are often open to compromise.

When stock markets are soaring, some investors might think anyone can do an adviser’s job. When markets plunge, people might assume advisers sit on the sidelines while clients’ assets evaporate. These investors do not understand how advisers add value or bring other benefits to the table. The following four key areas are where advisers can prove their worth.

Asset allocation

Studies show that most of an investor’s return over time comes from proper asset allocation. Graphically speaking, if a client is standing in the road and a speeding lorry is heading towards him, the adviser is the person who picks him up just in time and puts him back on the kerb – that has value. This is important because the index fund investor is standing in the road because they are fully invested 100 per cent of the time.

Investment expertise

In terms of sectors and industries, an index fund’s return should match approximately the performance of the index it tracks. Indices usually comprise sectors. Some will outperform, others will underperform. The broad index investor holds them all, while the adviser adds value by suggesting sectors to over- or underweight.

Emotional control

A stock market rises like an escalator and goes down like a lift. Few investors can be detached when the news predicts the end of the world. The return for mutual fund investors over time is often far lower than the return of mutual funds as a class – investors often buy at tops and sell at bottoms. Advisers help get clients “off the window ledge” when news is bad and encourage them into the market before all the good news is apparent.

Forward thinking

Finally, there is the question of yesterday’s winners. An adviser based in Pennsylvania in the US remarked that an investor might enjoy good investment results because they owned a portfolio superbly designed for the previous market cycle. Advisers help with forward thinking to position clients for anticipated changes in the economy.

So, while it is tempting to cut out the middleman by investing online rather than working with a financial adviser, choosing the former route means considering a portfolio or retirement savings as a do-it-yourself project. Some investors are skilled, others less so. That is where a face-to-face relationship with an adviser truly adds value.

Bryce Sanders is president of US financial services consultancy Perceptive Business Solutions



Another way of looking at things may be:-

People make judgments: some prefer to do so dispassionately by evaluating hard data, without “noise” from whoever may be presenting it.

Bricks and mortar: some may see fountains in the foyer as an unnecessary cost which is reflected in their investment returns.

Longevity: Being around a long time may not be tantamount to proficiency. Some consumers may well think that the adviser has been “…doing the right thing (isn`t that what Gordon Brown used to say?) year after year”. Others may think the fact that this young person has recently achieved Chartered/Certified status may mean they have topical knowledge.

Referrals: I believe that Hargreaves, Bestinvest, et al, may have had a few of these as well.

Accountability: A good FCA-authorised online adviser has to be equally accountable.

Avoid misunderstandings: It might be argued that misunderstandings are less likely if systematically documented as part of an online process. Human intervention can sometimes skew outcomes (e.g. risk-profiling scores are often higher when a male is being asked the questions by a female adviser).  Marriages can also fail because people have spent too much time face-to-face!

Relationships: Friendship with clients often comes a poor second when money has been lost. Trust is important, but don`t let`s get too sentimental, as clients tend not to be – a recent CFA survey found that only 7% of investors felt that financial firms “do the right thing.”

Negotiation: Train fares aren`t fixed when you go online.

Emotional  arguments: Those who get their overweight and underweight arguments right are rare. Humans (if Freud is to be believed) have an instinct to preserve – often translating into over-caution and missing out on market rises due to a herd mentality.

Incidentally, the IOD`s legal helpline is excellent and widely-used by its members.  And, I think the FCA may subject firms and their advisers to more stringent tests than E-Harmony does with its  potential dating suitors.

Clients really are too diverse to generalise about this much.

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Press Release – Money Guidance 31 December 2013

Published on: December 31, 2013
CategoriesDIY Investment

 FOR IMMEDIATE RELEASE                      

Manchester: Tuesday, 31 December 2013



Community Interest Company launches a financial planning website service -

where profits and assets are used for the benefit of UK financial consumers

The FCA-authorised Money Guidance has been granted Community Interest Company status – a first for a financial planning business of this type – with the aim of confronting consumer concerns over trust within the financial services sector.  Further, having already gained national coverage for providing risk assessment and cash flow planning tools free to the public has considerably extended its website offering.

There are now two distinct elements to the Money Guidance website:

(A)  The Free element continues to give access both to FinaMetrica`s risk-profiling and MoneyVista`s cash flow planning tools, along with detailed guidance on investment direction.  Helpful links are also provided to the True and Fair Calculator, Money Advice Service, Age Concern, Which? and APCIMS, with the aim of improving financial decision-making among consumers.

(B)  The new Premium Content is available for a flat annual fee of £50 and provides:

  • Unlimited transactional capability, using the acclaimed service from Royal London`s Investment Funds Direct Limited (IFDL), which accommodates lump sum or regular contributions into a wide range of investment wrappers – including ISAs and SIPPs.
  • Annual portfolio re-balancing prompts.

All additional Premium Content services, with the exception of the IFDL trading facility, will be made available free for a 3 month trial period to site visitors who register their interest.

The low annual fee will contribute to the future quality and scope of the Money Guidance community website.  For instance, the introduction of web-based advice from Chartered Financial Planners (at a heavily-discounted £60 hourly fee rate) is under active development.

The Money Guidance team brings with it more than 100 years` combined experience in this sector and includes two Chartered Financial Planners – Philip Dodd and Alan Cheetham

Dodd commented: “Hardly a week goes by without another DIY execution-only website appearing. Most are product-focused and do not equip people with the necessary planning framework for their personal finances. Traditional investment initiatives have come to be regarded with suspicion, and so a financial services business involving publicly-earmarked profits and assets should go a long way towards restoring trust.  Our website provides investors with essential financial guidance combined with low-cost execution services.”

For more information see





  • Money Guidance CIC levies a flat annual fee of £50; IFDL charges between 0.30% and 0.10% per annum on the value of assets held, subject to a minimum of £30 p.a. (with no further transaction costs for standard investment funds).
  • Money Guidance CIC offers Free access to FinaMetrica and other valuable support tools/links, plus Premium services.  This is a social enterprise which will use profits and assets for the furtherance of consumer financial planning knowledge.
  • The recurring theme of the Money Guidance website is the need for investors to focus on driving down costs. This includes avoiding the practice of buying last year`s winners, in favour of a disciplined, longer term strategy – centred on index-trackers.
  • For further information, please contact Philip Dodd (Managing Director) on 07976 689840 or email:



Money Guidance CIC, Bradley House, Prestbury, Cheshire SK10 4HF


Money Guidance CIC is an Appointed Representative of Alan Cheetham (Asset Management) Limited, a company which is authorised and regulated by the Financial Conduct Authority.

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From Vacuity To Acuity (In No Easy Steps)

Published on: November 10, 2013
CategoriesDIY Investment

“Those who are too smart to engage in politics are punished by being governed by those who are dumber”.  Although much of my brief flirtation with Ancient Greek in the 1970s has long since become a hazy memory, some may wish to parallel these words from Plato with the current behaviour of many consumers with financial services.

Perceptions take a long time to change.  From within the advisory camp, I have witnessed a gradual transformation of the attitude towards financial consumers – from the 1970s/1980s “prospects and  “punters”, through to “customers” and finally arriving at the present day “clients”.  That there has been a growth in professionalism in the financial planning sector over the last thirty years is indisputable.  And I am not talking merely about pieces of paper, when qualifications have become a sine qua non for continuing to offer advice. The metaphor of hunters seeking one-off kills of their prey has slowly been replaced with one of farmers who cannot afford to neglect their livestock (or indeed livelihoods).

Which makes it all the more ironic that consumers of financial services have been moving in precisely the opposite direction over the same forty year period.  From a time when financial advisers were generally regarded as adding some value (irrespective of the truth of this) to the prevailing attitude that they represent a costly level of intermediation which is not worth the candle, we have regressed into an era of dangerously polarised stereotypes.

Of course, this can be seen as part of a broader societal malaise.  It has almost become a mark of cleverness to profess generalised disdain for what was previously accepted. All politicians are liars. All journalists are weasels. All financial advisers are parasites. The difference between a hedgehog and a lawyer lying in the road is that there are skid marks near the hedgehog. You get the picture.

The problem with this convenient, compartmentalised philosophy is that the resulting cynicism produces far worse outcomes than any cautious engagement might have done.

At a time when (according to Axa Wealth) 56% of consumers said it was hard to understand investment jargon without the use of an expert, the numbers of those previously regarded as experts have fallen over the thirteen months to December 2012 from over 40,000 to little more than 30,000.  Some would maintain that this is the fault of investment jargon and that the industry should do something about it.  Possibly – but how simple can a complex subject become? Should we write off all professions as largely superfluous? You can, if you prefer, call a pension a, “pot to help you out when you stop working”, but this won`t dispense with 57 years of relevant legislation. You would not start from here, but unfortunately we are where we are.

One of the benefits of having a couple of years out of the front line of financial services has been the luxury of a dispassionate view about what has been happening in the interim.  If I had thought that client relationships had been degenerating a few years ago, this was nothing compared to what is happening now. Cynicism has bred mutual cynicism. The allegation is often that financial advisers can`t be trusted. It turns out that many clients cannot either, undermining any possibility of a productive relationship.

On a regular basis, wholly unexpected (and invariably unmerited) complaints are being received by competent financial planners  - often originating from Claims Management Companies. The latest I heard of yesterday was from an 82 year old gentleman who believed that he should have purchased an index-linked annuity some 17 years earlier instead of a level annuity. It took several hours of unnecessary research to demonstrate that the client had received £136,000 to date – against the £95,000 he might have received from an index-linked variant – and, notwithstanding his heart condition and net present values, the Queen`s telegram would need to have arrived on his doormat before the original advice could be seen as anything like questionable. Complaints, once an exceptional event, have now become a regular, debilitating occurrence. This development is sad and destructive, but hopefully reversible.

Two years ago, I thought I would save some  hard-earned cash by reading several books on Search Engine Optimisation and Digital Marketing. The result was mixed. On the one hand, there was an opportunity cost to my time and I might have earned more by “sticking to my knitting”. On the other hand, I managed to learn a lot about a subject which had previously been a mystery to me – which, in turn, allowed me to engage with and question those who held themselves out as experts on the subject. It would have been easier to be a cynic, but was ultimately more rewarding to become involved.

As financial advisers have had to “up their game”, it similarly behoves the recipients of such services to learn a bit more and become involved in what is an essential subject for their own future welfare. For example, they can document their own income, expenditure, assets and liabilities; they can get more in touch with their own attitudes to, and capacity for, risk; they can read some of the quality financial newspapers and journals.

The option, of course, is to use ignorance as a strategy and then blame someone else later – putting up the cost of delivering financial services still more. A trite and toe-curling expression it might be, but we really are all in this together.



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Trading Places

Published on: October 9, 2013
CategoriesDIY Investment

There is a sense that we have reached a seminal moment for the UK fund management industry.  I know that the lupine cry has been heard more than a few times, but this time it`s serious.  The land of milk and honey is becoming increasingly sweet and sour.

Let`s take a look at some of the research and data which have been buffeting the good ship Active over the last month or two.

First, we learnt (courtesy of SCM Private) that many active fund managers have been so intent on accumulating assets that they have defaulted to closet indexing mode. Herding instincts feel safe, but not particularly rewarding for investors if they pay for astute decision-making and end up £1.86bn down on the deal.  A “systematic abuse of the public” – opines Gina Miller of SCM.  It is hard to disagree.

Second, rationalisation is gathering pace.  This week JP Morgan announced it is, “to merge away more than 40 of its funds across Europe as part of a larger worldwide cull” (New Model Adviser).  Worldwide, JPM is planning to cut 100 of its 650 funds (“With hindsight…. some of our strategies and product launches have not been done in a thoughtful way” … George Gatch, fund chief).  Drill down a bit further into the story and we learn that the company is accentuating passives more.  JPM is far from alone in this respect and should be applauded for recognising what lies ahead.  Business Schools have a module specifically designed for this type of situation: “Managing Declining Profits”.

Next comes the news that index-trackers have managed to get a bit of a toehold and are moving towards 10% of funds under management in this country.  Now, in itself, that doesn`t appear particularly noteworthy, until we consider the trend which has been affecting our transatlantic friends.  In the last decade, American holdings of passives and ETFs rose from 18% to 34%; during the same period their annual charges fell from 0.93% to 0.64%.  Get my drift?  We may inhabit an island, but we are not going to insulate ourselves from this particular wave of pricing pressure.

There are still too many in the financial services industry who are using experiences of the last twenty five years to inform their current business model, without taking into account current external forces.  Advisers have an affinity for figures, so here are a few to think about. The average real annual return for world equities since 1990 was 4.15% and leading academics Dimson, Marsh and Staunton believe that the prospective real return going forward will be 3% to 3.5% per annum. Once the total cost of financial advice plus active fund management charges (including portfolio turnover and ancillary charges) has been calculated, this real return will have been eradicated. Anyone out there who still believes that the status quo will prevail on the future take-up of actives/passives? Think again.

This is really not another, “four legs good: two legs bad” argument.  I do think that active fund management can play a part – only not anything like as big a part as it does currently.  I would go so far as to say that the 90:10 split at present favouring actives is inversely proportional to what it should be for the mass affluent investors of the UK.

Do most investors need their fund managers to turn over an average of 80% of their portfolios each year (at a cost of an extra 1% per annum) in search of the Holy Grail? Should the cost of more than 60% of the assets managed in Europe be more than 1% per annum.  Well, on the basis that 95% of the compound long term return of the S&P came from from dividends in the 81 years to 2007, I would suggest that that the best interests of most investors would be served by putting their money in a low-cost portfolio, re-balancing it from time to time and stop meddling.

Yes, I hear the counter-arguments – such as, “What about the ability to take evasive action in a market dive?” Sorry, it does not happen.  In the last five years, 61% of Balanced funds and 67% of US Equity funds failed even to match the index.  Human intervention doesn`t work.  As John Authers wrote, quoting Freud in the “Financial Times” earlier this year: “most human decisions are made to seek pleasure or avoid pain” (as a result, most fund managers err on the side of caution and remain under-invested – missing the opportunity for pleasure).  Granted, it`s more profitable to delude ourselves, but it`s time to stop.

Our sister site, is full of such examples. Any remaining sceptics should take a look at two recent instances relating to the virtues of investing in Brazil and betting against Sterling:

And, finally, the prize for the most irresponsible piece of financial journalism of the week goes to Ali Hussain of The Sunday Times, who implored his readers to emulate one Mr Santosh Tiwari from Reading – “Follow my trades and earn 200%”. A notable contribution to the savings gap debate.

I`m going for a lie-down.



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Money Guidance CIC is an Appointed Representative of Alan Cheetham (Asset Management) Limited, a company which is authorised and regulated by the Financial Conduct Authority.

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