He who recommends it shall be liable for itBen Raven - Director
When the adviser is matching the client’s ATR to an investment portfolio, the fund managers are all selling to them. The adviser must ensure the volatility of the portfolio remains appropriate at all times, and owns all the risk if the portfolio does ever deviate. The adviser is liable because they are the ones who recommend it, not the fund manager.
The interests of the adviser and the fund manager are clearly not aligned in this scenario. To this end, the FSCS article contained a quote from the Chief Executive of Investment Quorum. Commenting on the relationship between adviser and fund provider, Lee Robertson said: “Providers are queueing up at advisers’ doors with their products, but when they don’t perform as expected they are nowhere to be found and advisers carry the can.”
Advisers make investment recommendations & own the risk if the client complains
The interests of the adviser and the fund manager are not aligned
The adviser must make decisions in the best interests of their clients.
All too often I hear “my manager takes an active view on currencies” or “currency markets even themselves out over the long run” or that “currency trades form a part of my manager’s overall macro strategy”. If you ever receive one of these responses you must remember:
It is not good enough for advisers to say their fund manager “takes care of it” for them. Nor is it good enough to ask a fund provider a series of questions, accept whatever answers they give and simply attach the notes to the client file.
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Over the last year the investment team have delivered strong risk-adjusted returns during a period of considerable uncertainty and market volatility.
The following is an abbreviated version of John Leiper’s article ‘Tide may be about to turn’ for Investment Week magazine. Follow the link and read his views on page 23.
Welcome to the Q2-2021 ‘Quarterly Perspectives’ publication.
Tavistock Wealth have come together with MSCI and LSE SU Green Finance Society to discuss Innovation in the ESG Eco System, alongside data analytics with MSCI.
Our Portfolio Manager for ESG, James Peel, was recently invited to provide his valuable insights into “Innovating Towards a Greener Future” as part of the London School of Economics Student’s Union Green Finance Society’s video conference: “Green Finance Summit 2021”.
In Nothing Is More Powerful Than An Idea Whose Time Has Come, published in November, we introduced the idea of a Great Rotation across US equity markets. As shown in the chart below, this rotation is playing out in textbook fashion with value stocks outperforming growth by about 20% since the end of last year.
The Fed’s dual mandate is price stability and maximum employment, but Jerome Powell has been unequivocal that it’s all about the latter.
Welcome to the Q1-2021 ‘Quarterly Perspectives’ publication.
This is the first blog since the holiday break. Whilst travel restrictions meant it wasn’t the holiday that had been planned, we adapted, and enjoyed the opportunity to spend some time together as a family and reflect on the last few months.
In its latest economic outlook, the OECD increased its expectations for global GDP.
Markets are ebullient, and they have every reason to be.
Following on from last week’s blog, the dramatic rotation from growth to value remains in place for now. Early signs of quick snapback into the prior channel have not yet materialised and instead the ratio has consolidated and even shown signs of moving.