IT’S hard to walk down a city street or read a magazine these days without seeing a Colonial First State advertisement.
IT’S hard to walk down a city street or read a magazine these days without seeing a Colonial First State advertisement.
Colonial joins a second prominent fund manager, BT Funds Management, in using mass media advertising to build brand loyalty with the general public.
Their advertising is noteworthy because it is so unusual. Fund managers generally focus their advertising and marketing on financial advisers, on the basis that advisers tell investors where to put their money.
BT and Colonial has attracted thousands of investors over the years, based on stellar investment returns in the past.
They are keen to retain the loyalty of those investors, now that they are going through a period of ordinary investment returns.
The Investment & Financial Services Association (IFSA) is another group that has recently launched a mass media advertising campaign, albeit on a much smaller scale than Colonial and BT.
IFSA is the peak body representing 100 fund management groups and it is promoting a booklet, Your key to investment success.
The booklet is a handy starting point for people wanting to understand the basics of investing and the role of fund managers.
More than three million Australians have invested $170 billion in retail investments managed by IFSA’s members.
As the booklet explains, managed investments provide a greater range of investment opportunities and the potential for lower risk through diversification.
For instance, investors wanting to put some money into shares can buy a handful of stocks through a broker, or they can buy units in a professionally-managed shares trust with 100 or more stocks.
Similarly, investors can put all of their money into a single rental property or they can buy units in a property trust with a mix of hotels, shopping centres, commercial premises and so on.
Managed investments enable individuals to spread their risk and place their money in the hands of investment professionals.
Concepts like balanced funds, risk-return trade-offs, master funds and wrap accounts are discussed in the booklet, along with the critical issue of fees.
Traditionally investors have paid entry fees of up to 5 per cent when they put money into managed investments.
Competitive pressure has pushed down entry fees and many products now have nil entry fees.
However, there may be a catch. These products often have exit fees, which must be paid if investors leave the fund within a specified period, often up to five years.
Entry and exit fees can be avoided completely by using an Internet service (see article below).
The booklet completely ignores the controversial issue of trailing commissions. These are ongoing payments made by fund managers to financial advisers, based on the amount of money that the adviser places with the manager.
Trailing commissions have become common practice over the past decade. Nevertheless, advisers should always disclose trailing commissions, to ensure that their clients are fully informed when they make investment decisions.
Colonial joins a second prominent fund manager, BT Funds Management, in using mass media advertising to build brand loyalty with the general public.
Their advertising is noteworthy because it is so unusual. Fund managers generally focus their advertising and marketing on financial advisers, on the basis that advisers tell investors where to put their money.
BT and Colonial has attracted thousands of investors over the years, based on stellar investment returns in the past.
They are keen to retain the loyalty of those investors, now that they are going through a period of ordinary investment returns.
The Investment & Financial Services Association (IFSA) is another group that has recently launched a mass media advertising campaign, albeit on a much smaller scale than Colonial and BT.
IFSA is the peak body representing 100 fund management groups and it is promoting a booklet, Your key to investment success.
The booklet is a handy starting point for people wanting to understand the basics of investing and the role of fund managers.
More than three million Australians have invested $170 billion in retail investments managed by IFSA’s members.
As the booklet explains, managed investments provide a greater range of investment opportunities and the potential for lower risk through diversification.
For instance, investors wanting to put some money into shares can buy a handful of stocks through a broker, or they can buy units in a professionally-managed shares trust with 100 or more stocks.
Similarly, investors can put all of their money into a single rental property or they can buy units in a property trust with a mix of hotels, shopping centres, commercial premises and so on.
Managed investments enable individuals to spread their risk and place their money in the hands of investment professionals.
Concepts like balanced funds, risk-return trade-offs, master funds and wrap accounts are discussed in the booklet, along with the critical issue of fees.
Traditionally investors have paid entry fees of up to 5 per cent when they put money into managed investments.
Competitive pressure has pushed down entry fees and many products now have nil entry fees.
However, there may be a catch. These products often have exit fees, which must be paid if investors leave the fund within a specified period, often up to five years.
Entry and exit fees can be avoided completely by using an Internet service (see article below).
The booklet completely ignores the controversial issue of trailing commissions. These are ongoing payments made by fund managers to financial advisers, based on the amount of money that the adviser places with the manager.
Trailing commissions have become common practice over the past decade. Nevertheless, advisers should always disclose trailing commissions, to ensure that their clients are fully informed when they make investment decisions.