Balance ...only ‘pleased’ ....rather subdued when it’s usually ‘excited’ in PEB lingo
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https://www.forsythbarr.co.nz/assets...tatement-f.pdf
You hand and surrender over your funds and financial assets like shares & bonds to be managed at their discretion - because they are professional, have superior knowledge and are 100% dedicated to maximising profits for clients.
No RTM, you haven't necessarily been doing it wrong and, also no, there shouldn't be a law against that kind of service. If so, maybe that should have been considered BEFORE investing?
You presumably gave them your dosh because you thought they could invest it better than you could and hence, you were happy to pay their fees and charges for doing so - hopefully offsetting those against a superior yield.
They presumably gave you a copy of their disclosure document and it clearly states the risks involved. The risks are no greater than if you invested your dosh yourself. It also states you can extract your dosh when you want - subject of course to liquidity.
One of the probable positive differences of them investing your funds is diversification.
Question of conflict of interest, and how a broking firm need to manage the conflict.
The risk with this kind of service with a stockbroking firm is that the funds are used to underwrite IPOs, placements and structured financial deals.
The firm takes all the underwriting fees if the underwriting is successful. The clients end up with the underwriting shortfalls of unpopular and unsuccessful deals.
Heads they win, tails the clients lose.
Thanks Dentie…..Scary tho it is...I am doing it all myself. I was joking.
But for the folk who use the "discretionary investment management service" to be put into companies like PEB without being asked....well....it seems wrong, even if it is diversification. They would I guess be people who are less confident to manage their own investments and wouldn't know what they were being sold. And we wonder why kiwi's like real estate.
https://www.stuff.co.nz/the-press/bu...s-up-claimants
Guess how these clients of Forsyth Barr ended up with Feltex shares?
Forsyth were one of the brokers I considered when I was getting started after retiring.
They were quite insistent on SKY being part of the portfolio. Even then I could see what might happen to SKY. They couldn't / wouldn't. That….and some additional research (Credit Sails) ...sent me elsewhere. But I digress.
Use a good fund manager and invest in one of their diversified funds, you will get all the diversification you ever want.
Give your hard earned funds to a broker’s discretionary investment account and the big risk is the broker using the discretionary funds to underwrite issues for fees, and the discretionary funds ending up with the unpopular and unwanted shortfall.
Different scenario if the clients get preferential access to popular and highly sought after IPOs and issues.
A well run fund (eg. Milford) certainly gets access to such issues on behalf of clients.