Apparently more and more fund managers are thinking of striking out on their own, or with a select few colleagues, to set up boutique firms.
How we can really know this beats me but, watching from afar, I can certainly see the benefits involved – and for EVERYONE too.
Speaking with the fund managers at one boutique firm in particular, whose name I won’t disclose, they certainly talk a good game.
For example, firstly, according to them, there are fewer of them and fewer funds, so they can give them more of their attention.
Secondly, there’s no boardroom pressure, no CEO who hasn’t a clue what separates one fund from another telling them how their fund should be run.
Thirdly, they all invest in their own funds. I know this is a pointless pre-requisite these days, a sort of ‘this is YOUR seal of quality’, but this boutique says its fund managers invest ruddy great sums in their own, and eachothers, funds proving, if there were any doubt, that they really do care and will make sure your money grows.
Normally about now, particularly given my tone in this article so far, you might expect me to write ‘But…’ and then proceed to have a pop at boutiques for their smugness or some other small character trait of which they should be avoided.
But…I’m not going to. My point here is not challenging or questioning the effectiveness of boutique firms. Instead I’m asking two things: Firstly, why aren’t there more already? And secondly, why don’t more investors demand their money to be put in them?
You might say: Well, that’s because they don’t know about them. And this is my only criticism of boutiques. They need to market, not the IFA, but the investor. So here I’m trying to do a little bit of that for them.
Industry talk over the years has asked: investment boutiques are all the fashion, but are they really all that different from their mainstream counterparts?
The answer is: absolutely. Although this is not, and never will be, true of all boutiques, the simple fact is that most are run by talented fund managers fed up with the constraints from ‘im upstairs.
Possibly for the first time in their investment careers, they are able to follow their own investment strategies and put their skills to the test in a way they see fit.
Of course, the talking point, and concern among boutiques, is that IFAs working on commission will never look twice at them because, well, what’s the point.
This is inextricably true and understandable, but it entirely misses the fact that many IFAs do not work on commission or solely on commission at the very least.
And it is to these IFAs that I say: Take a chance, do some research. You talk about hedging risk and, in my opinion, here is a pretty straight forward way of doing it right from the very start. Invest in boutique funds, and see what happens.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Scott Sinclair on 020 7034 2636 or email [email protected].IFAonline
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Avoidance, evasion and non-compliance
From 6 April 2019
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