One of the more interesting things about Anthony Bolton announcing his departure from Fidelity is the time and care put into selecting a replacement. Clearly his stepping down represents a business risk for Fidelity, but fund managers move all the time and seldom has there been such focus on a successor. Fund selectors give their views on his replacement in our news review on page 10.
It would be easy to be cynical and say that Fidelity is doing this to ensure continuing good performance and prevent substantial flows out of the fund. But does that matter? The interests of the investor are perfectly in tune with those of Fidelity. The structure necessitates a level of care.
The same can hardly be said of with-profits and this perhaps demonstrates how far the investment industry has come. We look at with-profits on page 30 and discuss whether they are still a viable investment option in the modern investing environment or whether advisers should use the opportunity of relatively high markets to sell out.
The contrast between Fidelity's response and that of the life offices could not be more marked. Fidelity has done everything in its power to ensure its investors are protected. Many of the life offices have done nothing to improve fund management performance. Leaving stock selection in the hands of a gibbon with a dartboard would have been a more effective strategy in many cases. Instead, life offices chose to impose MVAs to stop investors leaving.
So the level of care taken by investment product providers varies wildly, but investors must also take responsibility for the appropriateness of their investments. There is not one asset allocation mix that will last through life. Advisers are increasingly aware of this. Our survey on page 38 shows that - conscious of the regulators on their shoulder - advisers are looking to third parties for fund selection. Of course, advisers still have to select their third-party provider, be it a rating agency, life office or multi-manager. But chances are, the provider will have more resources at its disposal. Mistakes cannot be avoided, but the level of care is getting higher.
Cherry Reynard, editor
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