The quote’s adapted from Randy Newman’s classic skewering of a dinosaur rock star, but it seems to apply awfully well to all those performance-driven investment funds campaigns still littering the pages of the IFA trade press.
At the moment, scarcely a week goes by without a pundit announcing the demise of the hot-fund-punting intermediary. This week it’s the admirable Holly Mackay, whose latest Platforum research points out that a little over half of investment IFAs these days are relying on either model portfolios or the services of DFMs. With the remaining just-under-half making more and more use of a) passives and b) multi-managers, there’s not a lot of room left for hot-fund punters.
But the ad campaigns carry on remarkably unaffected. 25 of the 30-odd ads in the new Investment Week feature individual funds, and the large majority of them carry the kind of shouty performance-based messages that they’ve been carrying, much to the FSA’s irritation, for 20 years or so.
Of course we all know that even after the locking nuts have been removed, wheels take a while to wobble off their axles. This may just be a lag effect. But the fund promotion game seems so exceptionally reluctant to change that I’m wondering if I’ve missed something. Is there some reason why carrying on with the superficially-obsolete form of promotion still makes sense?
If so, and if either of my loyal readers has any idea what it might be, I’d be most grateful to hear it.