“What is FundsNetwork?’ my usually intelligent neighbour asked. “Well it is Fidelity, that big American investment group,” I replied.
He just shrugged his shoulders as a sign of non-recognition.
I was slightly incredulous as he is a bright bloke, but as he was “incandescent with rage” (his words) at the time, I did not feel like chastising him for not knowing what FundsNetwork is.
He was angry because he had just come out of his local Halifax to do the 2010/2011 Isa for himself and his wife and they had messed it up.
So, I helpfully suggested FundsNetwork and a cup of coffee. “It is a great big online supermarket and you just go on and select the funds you are interested in and put them into your Isa,” I explained.
In the interest of balance and impartial advice I explained he could also use Cofunds or see an IFA. Neither got any recognition – I think the cappuccino had arrived at this point.
“How do I know what fund I want?” Good question I thought, especially as it is hard to do a fact-find in Starbucks on a Saturday morning when you are not actually regulated to do so.
I had a slight advantage because I know the age of his children, have an idea of his salary and know he has some property as investments. “Just think of the Isas as extra pensions. So take a 20-year view and make investments with the objective of them growing over that amount of time at least.”
That seemed simple enough and I suggested he do a split between UK equities and emerging markets. He wanted to fully fund both Isas, so I suggested a straight 50:50 split between two funds. I am not telling you what I recommended – I would like to say he had heard of both groups I suggested, but he had not, which is odd because he is in brand marketing – normally consumer products, so he spends his time looking at other companies’ adverts.
A few days later I went off to the Chelsea Flower Show, courtesy of M&G. I am no gardener but I get the connection between gardening and fund management – “nurturing investments”, as M&G says. A nice simple message but one the Compliance Gestapo insist in its own way is a “financial promotion”, so that simple tagline comes with the usual raft of explaining who and what M&G is and the small-print qualification for the £127bn under management.
As I wandered around the gardens and thought about the direct link between gardening and growing your wealth, the first thing that came to mind was my irate neighbour.
He is surely a good example of why more people are either not aware or do not understand what investing is all about. The promotion and advertising that forces all these stupid caveats around the industry means the marketing of funds is held back in a way that is surely to the detriment of everybody.
Now my neighbour also went to the Chelsea Flower Show, so he will understand the idea of nurturing investments and it will be the second time he has heard about M&G in only a few days.
Lawrence Gosling is the founding editor of Investment Week. His views are his own, any comments to him at lawrencegosling@sky.com
