Listed financial planning firm Snowball Group (Snowball) has called on its core fund managers to remove opaqueness around managed funds in a bid to create greater clarity for clients, the firm’s managing director has said.
The move has been prompted by the findings of an InvestmentTrends research recently commissioned by Snowball, the group’s managing director Tony McDonald said.
“We are insisting amongst our fund managers that we have see-through so that we can communicate better with what’s going on,” McDonald said.
McDonald described ‘see-through’ as the firm’s ability to quickly, efficiently and broadly monitor investments online and see what’s going on in the funds.
He said the research found there was a big difference in dissatisfaction among clients with the fund managers of managed funds.
“They were markedly different in terms of dissatisfaction. Now we think there are a number of reasons for that. We think the main reasons that there is a sense of opaqueness with managed funds that needs to be dealt with,” McDonald said.
“So in terms of managed funds as a product they do deliver great diversification benefits, but their weakness is their see-through. To see-through what’s really going on particularly when in a GFC [global financial crisis] you get perceived underperformance.
“When things are going swimmingly well, opaqueness is a sin which is forgiven very easily. When things are not going well opaqueness really counts.”
He said Snowball’s investment centre of excellence, Officium, through company chief investment officer John Nunan and head analyst Anita Bradley is talking to the firm’s 20 core managers about see-through.
Commenting on fund manager feedback, McDonald said: “In the main, the feedback has been accommodative.”
The survey targeted high end advised and unadvised clients of accountants, financial planners, stockbrokers and bank linked clients.
