Chase de Vere 'putting customers into failing funds' - UK adviser news round-up
In this round-up of UK adviser related news from the weekend newspapers, one of the stand-out items is a report that Chase de Vere customers are being moved into expensive investment funds that are failing in half of cases, according to internal documents reportedly seen by The Times.
UK Advice giant's premium price tag for failing funds
Chase de Vere customers are being moved into expensive investment funds that are failing in half of cases, the company admitted in internal documents seen by The Times.
The advice giant offers 12 ready-made fund portfolios, called Select, and six of them have returned less than the typical fund to which they compare, The Times reports. Chase de Vere customers have been advised to invest more than £650m into these funds.
It is understood to be keen to have £1bn in them by June 2021. Customers are charged 0.36% for the service on top of Chase de Vere's usual levies, so hitting this target would make the firm £3.6 million a year.
The Times also claims Chase de Vere customers benefit from what the firm calls a 2% annual "decency limit" on costs. However, a source claimed that this cap applies only to investments outside of Select. The firm declined to respond to this claim.
Chase de Vere declined to respond to requests for comment. The company told The Times: "We will not respond to requests for information from Times Money. Based on our previous experience we believe they will misrepresent our company and they have no intention of writing a fair and accurate article."
‘I discovered a pension worth £140,000': how to find lost pots
Finding lost pension pots can be a tough business and this article in The Telegraph runs through the story of how one widow and her financial adviser struggled to track down her late husband's £140,000 pension pot.
Dormant pensions are set to becoming more common too, with the government estimating 50 million of them could exist by 2050 as people tend to work more different jobs throughout their lifetimes.
This is not a good thing for savers, argues Now:Pensions' Joanne Segars: "The proliferation of small pots is not good for members: they cannot benefit from economies of scale, easily lose track of their deferred pensions and face multiple charges on each pot - for administration, benefit statement and levy charges, for example."
Dividends are not dead — but your strategy might need recharging
Covid-19 has merely "accelerated the inevitable", writes Merryn Somerset Webb in the Financial Times - that dividend cuts were on the way from a number of companies.
The editor-in-chief of Money Week points out that only in France did dividends fall by more in the second quarter of 2020 during the global pandemic. Dividends "are not exactly dead", she muses, but her article here is all about the growing importance of earnings and the growing emphasis placed on them by investors. What's scary, she concedes, is that if you take dividends out of the FTSE's 10-year return of 75% it falls to 25%.
However, Somerset Webb continues: "But if the virus has given managers the cover they need to restart dividends at a lower level — and to divert cash into desperately needed investment instead — that is good news."
This article first appeared in International Investment's sister title Professional Adviser
