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Money Masterclass: the experts share their secrets

Looking for financial inspiration? We asked leading financial planners and fund managers to share their pearls of wisdom.


by Harry Brooks on Jun 26, 2012 at 15:25

Money Masterclass: the experts share their secrets

First off, the financial planners on basic tips for money management.

Gareth Howlett, Brooks Macdonald

1. Saving is like keeping fit; it’s good for you but you feel the pain before the gain. Get over this by making it part of your routine: set up a standing order to a pension plan or an investment trust saving scheme and leave it alone.

2. There is no such thing as free advice. Go to an independent financial adviser who will earn his fee by helping find the best mix of investments for you.

3. Don’t jump on bandwagons. When the latest investment fashion is splashed all over huge billboards, the easy money has already been made.

Read more of Gareth's advice here.

Charles Mackinnon, Thurleigh Investment Managers LLP

1. Never think it’s too little to make a difference; £10 a month into a savings scheme will grow to several thousand over the years.

2. Make it automatic. We all have limited will power, so set up a standing order and try to forget about it.

3. Make it inconvenient to get the money out. Long-term savings should not be raided for short-term cash needs.

Read more of Charles's advice here.

Lee Robertson, Investment Quorum

1. Use the power of compound interest and receive interest on interest.

2. The sooner you start the more time compounding has to work.

3. Make regular, disciplined payments.

Read more of Lee's advice here.

Joss Harwood, Eldon Financial Planning

1. Take a reality check right now.

  • How much will I need to live on when I retire?
  • Where will this income come from? – honestly!

2. Take ownership of your own financial future.

  • When can I retire?
  • How long have I got to build up a ‘pot’?

3. Take action now.

  • No more excuses, no more delays, you will feel better just for making a start – put extra cash aside this month into an account called ‘retirement fund’. You can move it later.

4. Take advice

  • You may find it isn’t as daunting as you thought; start with information from 
  • Ask your friends, colleagues and relatives whom they trust to advise and guide them, and what the service costs.
  • Use Citywire's Adviser Finder tool to direct you to a top quality adviser.

Read more of Joss's advice here.

Saran Allott-Davey, Heron House Financial Management

1. On planning: set aside a couple of hours every month to review your financial planning. Make a list of everything that needs to be done, then monthly aim to progress one or more of the items so that you move towards your financial goals. Breaking it down this way makes it easy to take small steps rather than being daunted by it.

2. On funds: don’t get caught out by fads and buying last year’s star funds, bear in mind if it looks too good to be true it probably is. Choose a few good long term well managed funds and stick with them.

3. On tax: don’t waste hard earned returns by paying more tax than you need, as part of your annual financial plan, review your tax planning and look for ways to make the most of your tax allowances.

Read more of Saran's advice here.

Stuart Fowler, Fowler Drew Limited

1. Visualise your past, from the future: imagine yourself in the autumn of your life looking back and thinking what would have caused you most regret and what would make you feel ‘job well done’. Anything involving money!

2. Ask for help: everything is easier with a plan but turning your ‘no regrets’ future into a plan requires professional help. Go see as many IFAs (not your local bank, please) as it takes to find the financial planner who ‘gets the visualisation thing’.

3. Pay up for planning and pay down for products: this is the opposite of what people think (and the industry wants you to think) but planning is your key and products are really only commodities, so keep them basic and low cost.

Read more of Stuart's advice here.

Barry Horner, Paradigm Norton Financial Planning

1. Understand the initial and annual charges of your investments as charges over the long haul destroy value.

2. Structure your investments to meet your broader life goals – you can’t take it with you!

3. Invest in good & professional financial planning. Good financial planning should pay for itself.

Read more of Barry's advice here.

Alan Steel, Alan Steel Asset Management

1. Ask around to find the best independent financial adviser (IFA) you can trust to help you establish long-term goals in easy to understand terms, kick you in the arse to keep you on track, and help get you there, through thick and thin.

2. Don’t be tempted to invest where everybody else is, and only invest in the most tax-effective ways, being very patient along the way.

3. Don’t listen to the popular (or should I say unpopular) media, economists (or pessimists as they’re better known), hairdressers, Robert Peston and taxi drivers – they’re usually wrong.

Read more of Alan's advice here.

David Crozier, Navigator Financial Planning

1. Understanding your motivation for saving – nobody ever contributed to a pension because they wanted a pension; they wanted to retire with a decent income.

2. Time in the market is much more important than trying to time the market – remember that Albert Einstein said that compound interest is the most powerful force in the universe.

3. Making decisions based on emotions will cost money – pre-commit to sticking with the plan, no matter how you might feel.

Read more of David's advice here.

David Man, RMG Wealth

1. Find a manager who is in the business for the long term and is owner-managed.

2. Think of a long-term savings plan as an investment in the same way as you think about your house as an investment.

3. Regular investing smoothes returns.

Read more of David's advice here.

Amy Lazenby, Wilson King Investment Management

1. A little bit of work now will benefit you greatly later on. 

2. Make sure you understand what you are doing. 

3. Do something that requires very little attention and that is low maintenance.

Read more of Amy's advice here.

Now for some investment wisdom from the fund managers

Gary Reynolds, Courtiers

1. There is no such thing as reward without risk – if someone tells you otherwise they are lying.

2. You have to kiss a lot of frogs before you find a handsome prince – before you find the next Microsoft you will have many disappointments and probably end up broke

3. There is nothing wrong with index tracking, it’s cheap, diversifies your risk and you know what you are getting – in money management boring is exquisite.

Richard Scott, Hawksmoor Investment Management

1. Seek to learn from great investors of the present and past. Reading and reflecting on the wisdom of Warren Buffett is a good place to start, and his annual letter to the shareholders of Berkshire Hathaway should be essential reading for all investors – professional and amateur!

2. Cultivate humility. This isn't original, it's a tip I read about 20 years ago that Sir John Templeton gave to a journalist who asked him what one attribute someone should seek when going into investment as a career. So many of the worst investment mistakes that are made both on an individual level and as an industry, are a result of over-confidence and a lack of humility. Even the most talented investors will look like idiots from time to time, but by cultivating humility you have a better chance of learning from the times when things don't go your way, and reacting in the right way to get things back on track.

3. Always try and look for a margin of safety in an investment. (Thank you Benjamin Graham!). Be very wary of investing in things that stand at unusually high valuations compared with their past, and learn to be patient in sticking with good quality, cheap, our-of-favour assets. A good tip to bear in mind at the moment.

Read more of Richard's advice here.

Nigel Thomas, AXA Framlington UK Select Opportunities

1. Things won’t necessarily get better or worse – but will become different. 

2. Two-thirds of the long-term returns on equities [shares] come from the compounding of re-invested dividends: remember (if you can afford it) to do so.

3. Don’t cut your flowers to water the weeds ie, let your profits in good companies run and cut your losses. 

William Littlewood, Artemis Strategic Assets

1. Never get too attached to an investment. It doesn’t know you own it.

2. In general think long term. Hold investments which should still be doing well five and 10 years from now.

3. Always understand what you are in investing in and avoid tips.

Read more of William's advice here.

David Jacob, Henderson Global Investors

1. Investment is a long-term project. Lengthen your time horizon to as long as your goals allow.

2. Don’t follow hype. Follow cash flow. Your preference should be for good reliable dividend and coupon income.

3. Build a solid sensible core portfolio with most of your assets. Allow yourself some spice and excitement, but only in moderation.

Read more of David's advice here.

Ian Henderson, JP Morgan

1. Keep your eyes open. New trends are often in front of everyone’s eyes and trends tend to be more durable than people think.

2. Be patient and balance your risk. Markets can often be irrational over the short term.

3. Invest in things you understand – don’t invest in hope alone.

Read more of Ian's advice here.

Richard Buxton, Schroder UK Alpha Plus

1. Diversify in non-correlated assets. Otherwise known as ‘don’t put all your eggs in one basket’. Have a mix of assets so as to lessen the chances of everything going down (or up) together.

2. Pound cost averaging is fantastic for the longer-term saver.  In other words, regular savings. Invest a set amount every month and it means when markets are low you buy more for your money – and as importantly when markets are high you buy fewer shares / units / funds. Compound this over many years and it is very powerful. It does mean you have to set a budget for monthly investment and stick to it regardless of short-term circumstances, however, to get the full benefit.

Read more of Richard's advice here.

Giles Hargreave, Hargreave Hale

1. Run your profits, cut your losses.

2. Average up not down.

3. Capture the mood, don’t fight against it.

Read more of Giles's advice here.

Jonathan Ruffer, Ruffer

1. Never straight-line. Life is never the shortest route between two points.

2. Be careful not to round. Many errors are due to rounding.

3. Squaring-up to losses is probably the right angle to have on investment.

Richard Oldfield, Oldfield Partners

1. If markets go down, don’t despair. Lower prices have more chance of leading to higher returns in the future.

2. Fees matter.  Avoid funds with performance fees.

3. Don’t look at your investments feverishly often. Don’t switch around all the time. Decide on a plan and invest steadily.

Read more of Richard's advice here.

Micky Breuer Weil, RIT Capital

1. In the long run, investment returns reflect growth – thinking about what and where will grow is not something that favours the professional investor – in fact, the daily job often obscures clarity of thinking about long-term ideas.

2. The best investments are usually made when others don’t agree with you. Be cautious about making an investment when everyone agrees. Indeed, the greatest losses generally  occur when an investment is over-owned.

3. Long- term wealth is about compounding returns – you do not have to outperform rising markets but you need to lose less in bad times-then you will compound ahead of markets over time.

Read more of Micky's advice here.

John Chatfield Roberts, Jupiter Asset Management

1. Buy when others are fearful. But it will be difficult, because there always appear to be good reasons why there is fear; prices will be falling and the newspaper headlines will not make pretty reading.

2. Buy investments that don’t have a time limit. Time will often bail out a badly-timed decision, but anything that can expire – an option, derivative or bond, can expire worthless before whatever you were hoping to happen actually does!

3. Run your winners and cut your losers. As Warren Buffett says: ‘Don’t garden by digging up the flowers and watering the weeds.’

Read more of John's advice here.

Edward Bonham-Carter, Jupiter Asset Management

1. Know your own attitude to risk.

2. Creating a portfolio takes time and thought; similar to nurturing a garden. Be patient and don’t make frequent changes. 

3. Don’t try and time the market. Invest on a regular basis.

Anthony Cross, Liontrust Asset Management

1. Invest monthly: This avoids having to take a market view.

2. Experience pays: Look for managers with good-long term track records of investing rather than unproven new comers.

3. Avoid fads: Do not believe the hype surrounding funds and stocks promoting a new theme. They usually disappoint.

Hugh Young, Aberdeen Asset Management Asia

1. Don't buy what you don't understand. 

2. Do your homework.

3. Don't pay too much attention to the stock market's daily vagaries. 

Read more of Hugh's advice here.

6 comments so far. Why not have your say?

h nelson

Jun 26, 2012 at 17:08

Would that all advisers were like Gareth Howlett. "Savng is like keeping fit--you feel the pain before the gain"

I don't know what exercises he's doing ,but, he's certainly got both feet on the ground

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Old Skool

Jun 26, 2012 at 17:19

I must admit that this just feels like the same old self serving clap trap dealt up by IFAs who would not recongnise a good investment if it bit them.

1. Asset Allocation is 90% of everything - diversify amoungst the main asset classes and currencies.

2. Do not pay a penny more than you need to - passive trackers are the way to go (thank you Vanguard).

3. Move slowly from risky to low risk assets as you get near the end (retirment or death which ever comes first!)

4. Save regularly about 15%-20% of what you earn.

5. Dont be afraid, you will be at least as well off as using these guys or any professional fund manager.

6. Rebalance your fund once a year (in August, when everyone else is away) returing to your ideal weightings.

7. In extrimis when the world looks like it is going to end, holding a lot of cash is ok for a while, but be brave and get back quickly in when it turns.

Feel free to comment and add!

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paul kaye

Jun 26, 2012 at 20:12

nothing new then just the same old recycled so called "secrets" its common sense!

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Jun 26, 2012 at 20:51

Thank you, Euclid Ruffer.

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Michael Hellman

Jun 26, 2012 at 22:20

Timely reminders,thx. Unfortunately it is time in the markets with reinvested divis. Unfortunately ,because Im now old enough to see the benefits!

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Bill lawson

Jun 30, 2012 at 12:46

Spend it all while you can inflation will make your pension worth less or some outfit will find a way of reducing it or prevent you drawing it before your end

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