Managed Funds – How a Financial Planner Adds Value

By Jason Fittler

Managed funds are not passive investments, they’re active investments.

Passive investments are property, index funds and cash. Why? Because very little activity is required to produce a return. You simple buy and hold for at least 20 years. Except cash, cash will never give you a good return.

Managed funds are not passive investments, true you do not need to trade them as actively as direct shares but you do need to continue to monitor them and move your money into the investment which is going to out perform in the coming year. That is why you need a Financial Planner.

Much like your stock broker will continue to review your shares and advise you on how to squeeze some more profits out of them, so to does your Financial Planner with your managed funds.  The difference is that when reviewing your managed funds the Financial Planner is in fact reviewing the people running the funds and how they’ve performed; also your financial planner will only review your funds every 12 months or if something drastic happens.

This regular review of your investments will provide a far superior return over the longer term.
Now cast your mind to your Superannuation, the largest investment you have and the one you will most likely have for the longest time. When was the last time you or your Financial Planner reviewed the investments you have in your Superannuation?

If you are in a cheap industry fund, do you even know where your funds are invested? Have you ever met the person in charge of your money? When was the last time someone contacted you about your Superannuation?

Now you know why it is cheap and why over the longer term it will under perform.