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Do we really know what happens with our investments once we have paid our broker?

Do stockbrokers and financial advisers keep a watchful eye and genuinely take care on our behalf?

I'm pretty sure that no financial consultants will ever suggest that they might occasionally take their expert eye off the ball but how difficult is it for us 'non-experts' to keep our eye on our investments with a little inside knowledge?

It is easier than you think!

Would you leave a wad of banknotes and coin bags in full view of the general public?
Then why would you leave your investments unattended?

Before we look at simple fund tracking software available to anyone for a couple of quid per week, let's look at some very basic private portfolio management tactics.

Buy a simple box file or use an old shoebox, but ensure you retain all paperwork and documents that you get from your bankers, stockbrokers, mutual-fund firm, financial adviser and anyone else associated with your investments.

Double check your trade confirmations and holding statements, to ensure they are accurate, if you have any queries, contact the sender and make notes in a diary of your contact and response. Don't be shy in asking for written responses to keep your records straight. If sending and receiving emails, save them on your PC and print them too. If you don't understand your investment statements or you feel there is a problem with some of your investment portfolio's performance figures, don't wait until it's too late to do anything about it. Your broker is fully aware that you are not an investment expert so don't be embarrassed. Speak up right away; make yourself heard … loud and clear.

You might want to appoint a proxy to handle your investment documents, if so ensure copies of all documents are sent to your proxy. Be mindful that if you are incapacitated for whatever reason, careful maintenance and storage of your investment portfolio and its performance is even more critical.

Get internet-wise and you can easily track your investments online. You might have a couple of options here. It may be that your bank or broker has online facilities and you will probably need login information such password etc to gain access to your online investment portfolio.

Fundrider

Alternatively you might want more independent facts.
Fundrider.co.uk is a subscription based system for the management of your online investment funds and offers crucial advice on swapping between funds.

Fundrider uses a simple mathematical equation to identify those funds which are growing best so that you can invest more there than the Managed Fund would ever be allowed to invest and lets you benefit from investing in the 'best' growth funds at all times

Fundrider will assist in optimising your investment fund portfolio using 'Fund Switching' techniques; fund switching is an investment industry term which means selling one investment to buy another within the same product range. For example; To sell a 'European Fund' and buy a ' Gilt and Fixed Interest Fund' - and it works for ISA's, PEP's and a Whole Range of 'Investments'.

It makes no difference which company you have chosen to invest with, Legal & General, Norwich Union, Friends Provident, Fidelity, Skandia etc., any modern Pension arrangement, (including Stakeholder and SERPS replacements) ISA, PEP, Unit Trust, OEIC or Off-Shore Bond will offer a range of different funds to choose from or to spread your money over, such as a Managed Fund, UK Equity, FTSE Tracker, Gilt, Property, European, American, Far East and so on.

These funds go up and down at different times and at different growth rates.
Knowing which fund is growing best at any time and being able to move your money into and out of it (known as 'switching') is key to getting much better growth from you're investment.

I don't understand computers … I'm not technically minded!

You might have heard of 'Fund of Funds'.

This is a mutual fund that invests in other mutual funds. Just as a mutual fund invests in a number of different securities, a fund of funds holds shares of many different mutual funds. These funds were designed to achieve even greater diversification than traditional mutual funds.

John Wright of FundRider explains this:

"Probably because they are unsure which fund to invest in, most people simply choose to invest in the 'Managed Fund' and are often encouraged to do so by their advisor. It offers an 'easy' option in a number of ways for both investor and advisor. It fits a medium risk investor, can easily be justified to the regulators, does not require expensive ongoing monitoring or other administration, does not require too much in depth knowledge on behalf of the advisor and should give a better return than a bank deposit.
Let us take a closer look. Compare the amount of money invested in the Managed Fund against others within the product range, even ones which have performed much better over sustained periods.

Figures released a couple of years ago by Standard Life, showed that there was £5,531 million in their Managed Fund which had gained 30% over the previous 5 years compared to just £225 million in their American Fund which had gained 58% over the same 5 years. Twenty times more money in a poorer performing fund within the same company.

A thinking man must ask WHY? Some may tell you that the higher Risk/Reward factor is the reason. Don't believe them, in the same Standard Life figures their Property fund, which is less risky than the Managed Fund, stood at £899 million and had grown by 85% in the same time. A more likely answer is a mixture of self interest on behalf of advisors and apathy on the part of their clients.

The money in the Managed Fund is normally invested into the company's other funds but with pre-determined maxima and minima in each, meaning that you are likely to have some money invested in say the Japan fund even at times when it is literally a 'Dog' and a maximum of perhaps 8% when Japan is 'flying' like a 'Golden Goose'. The UK Equity fund normally makes up between 40% and 60% of the Managed fund, imagine the effect this has when the UK is underperforming other markets, which it does from time to time.

These limitations affect your investment performance.

An Industry 'Secret'.

There are a small number of Financial Advisors who do offer a Fund Switching service to their clients but of course they have to charge for this service. They have a duty to ensure no client invests in a fund that is above their personal risk/ reward criteria without some money being in lower risk funds to give a balance. This balance has to be monitored and a record kept of any switches made. Sometimes a switch can occur at an inconvenient time (Christmas Eve) which causes costly administrative difficulties.

NO WONDER FEW ADVISORS OFFER SUCH A SERVICE TO THEIR CLIENTS.

When a firm requests a switch for their clients it can result in many millions of pounds being moved from one fund to another which has caused some leading companies to block a switch or restrict the number of their funds that can be used by a particular advisor firm, there is even a case of one fund supermarket refusing to do business with a Financial Advisor and threatening to report them to the regulator for 'trading', a reportable event where money is reinvested into another fund within three months.

Companies boast about their numerous fund links in order to get your business then shy away when you try to use the potential the investment product offers. Why?. When you look into things it seems the whole industry, including the regulators, are conspiring to keep you in the dark regarding the potential benefits of switching and do not encourage it.

Don't let them, you can shake free of these limitations.
Fundrider uses a simple mathematical equation to identify those funds which are growing best so that you can invest more there than the Managed Fund would ever be allowed to invest and lets you benefit from investing in the 'best' growth funds at all times.
No One Can Look After Your Money As Well As You. If You Don't Care Enough To Look After It, Don't Expect Someone Else To.

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