September comes around again, and to mark the turning of the calendar page there is condensation on the windows this morning. But there’s sunshine too, and a sense of getting back down to it after the interruptions of the summer, not least with the arrival of our newest member of the cat basket yesterday, who is already showing the rest of us up in new and exciting ways. And the kids – *sinks to knees like the bit at the end of The Shawshank Redemption* – are back at school, though we didn’t make it 24 hours before one of ours was sent home as a close contact of a junior plague-carrier. Sigh.

A bit of good and hopefully interesting stuff to share with you this week. Morningstar has published updated research as part of its annual Mind The Gap study on how much of market returns US investors in mutual funds and ETFs typically capture. The headline is that investor returns are as much as 1.7% less than actual fund returns; typically because of mis-timed purchases and repurchases. Or, as your mother told you, “if ye pick at it it’ll no’ get better”.

This is heady stuff; if investors can be saved from themselves by someone who helps them with their finances (anyone? anyone? Bueller?) then we have a good handle on the value of advice in at least an investment timing context. “Yes, I may charge you 1% Mrs McGillycuddy, but I saved you 1.7% before we even started because you suck at investing” sounds like a killer start to a client review to me. There is a reason I’m not a financial planner, but I can’t remember what it is.

Some care is needed, though. This is a US study, and it’s still the case – I think – that more self-directed investors over there think they know how to time markets. That said, with HL reporting much higher dealing volumes than pre-Covid (thanks to my correspondent Ruth Gilbert for a spirited discussion pointing this out) during key periods of volatility, maybe we’re closing the gap, and it’s probably not a gap we want to close.

Further interesting findings from Morningstar (which isn’t a client by the way, this is just good stuff) – ‘allocation’ funds, which we would call multi-asset funds, missed out on much less of total returns than sectoral funds – 0.69% instead of up to 1.7%. That suggests that if the game is optimising returns by following the doctrine of masterly investing inactivity, then your basic multi-asset single-line-of-stock fund might have something to offer over more complex portfolios. Or maybe not. Oh, and periodic automated rebalancing is still a good thing.

Anyway, the whole thing reads like a validation about how UK advisers and planners tend to run CIPs for your clients. It’s not a straight read-across to the UK, it’s only really true in positive markets, and you don’t want to overclaim off the back of it, but nonetheless it’s nice to be reminded, when the haar rolls in, that you lot are doing a good job not just in planning but in investing too, and a better job than most investors can do by themselves. Give it a read, and award yourself a Caramel Wafer – the king of biscuits – as you do so.


Finally, I want to take a moment here to remember and acknowledge Jeremy Grime, late of Canaccord, who sadly passed away a week or so ago. He was one of those folk who could write about our dull industry in such a way that you felt you knew him, even if you’d never met, and that’s a rare thing. His Daily Grime email was informative, funny and irreverent, and always worth a read, and I enjoyed periodically swapping nuggets of info with him and being sarky about the issues of the day. Somewhere on the astral plane, a new inhabitant is affixing awful 3D emojis to celestial investment messages and cackling as he does it. RIP Jeremy.

  • HomeGames is back, and to start our new season off in style we have Nick Elston who is a well-known motivational speaker and mental health communicator. That doesn’t really sum him up very well; you have to hear him to work it out. Happily you can, today, at 12.30pm, here. We’ve got a brilliant run of guests coming up (John Porteous of Charles Stanley next week and Iona Bain 2 weeks after that), so do kindly block out your diary each week or catch up on YouTube. You may have another Caramel Wafer each time you tune in, but only one, not the packet. It’s good to share.
  • We’re not letting Tom have a slow start – he’ll be on at the FT Advice Forum next Tuesday, talking DB alongside other storied commentators – register here.
  • Some big developments are afoot with Platform Analyser – come and check in tomorrow. In fact, check in today and tomorrow so you can see the difference. In Nucleus’ recent census, PA was the second most used platform analysis tool. This time next year, Rodney…
  • You’ve had it much too light for far too long. So your music choice this week is an absolute faceripper of a new tune from Finnish melodeath stalwarts Omnium Gatherum. This is a great track and you will enjoy it if you let yourself. But 1985 called and it wants its video back; I’m really not sure what the cars and cheerleaders are all about. Still, here’s Paragon and you can always shut your eyes. Oh, and for the 3.8% of you who like this metal stuff, Happy New Iron Maiden Record Week! Senjutsu is out on Friday.

See you next week