Skip to main content

Financial Planning Week: Does your financial planner use investment companies?

9 May 2017

The AIC endorses Financial Planning Week

The Association of Investment Companies (AIC) has endorsed Financial Planning Week, which draws attention to the value of financial planning in improving people’s financial “fitness”. However, the AIC also stressed the importance of ensuring that your financial planner is able and willing to recommend the most appropriate investments to enable you to achieve your financial goals.

Nick Britton, Head of Training, AIC said: “Since the Retail Distribution Review (RDR), the number of financial planning firms using investment companies has increased rapidly, from less than 600 firms in 2012 to nearly 1,400 firms in 2016. However, despite this, a majority of firms still do not use investment companies in their financial planning – largely for historical reasons.

“This is a shame, as investment companies offer good long-term performance. For example, the average investment company has returned 112% over the ten years to the end of March 2017, compared to 82% for the average open-ended fund and 74% for the FTSE All Share index.

“Investment companies won’t be right for every client, but that doesn’t justify some firms excluding them altogether. Before choosing a financial planner, a good question to ask is whether they consider investment companies in making their recommendations – and if they don’t, why not?”

According to FCA rules, any financial planner who calls themselves ‘independent’ should consider all retail investment products including investment companies.

The AIC runs a free programme of education and training for financial planners to bring them up to speed with investment companies. To keep updated with the latest face-to-face and online training opportunities, financial planners should register on the AIC’s Financial Advisers centre.

-Ends-

Follow us on Twitter @AICPRESS

Notes

  1. Performance data is to 31 March 2017 based on the last official close prices at the month end, on a % share price total return basis excluding VCTs. No expenses taken into account. Source: AIC using Morningstar.
  2. Data on number of financial planning firms using investment companies from Matrix Financial Clarity, calendar years 2012 (last year pre-RDR) and 2016.
  3. The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment.  Today, the AIC represents a broad range of closed ended investment companies, incorporating investment trusts and other closed ended investment companies and VCTs.  The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help Members add value for shareholders over the longer term. The AIC has 344 members and the industry has total assets of approximately £164 billion.
  4. Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance.  The value of investment company shares, and the income from them, can fall as well as rise.  You may not get back the full amount invested and, in some cases, nothing at all.

Announcements

View the latest investment company announcements or search the 12 month archive.

View announcements

Bringing VCT investment to life

See how VCT investment has helped dynamic businesses in the UK grow.
 

View company stories

Sign up for AIC email updates

Receive regular updates on the latest investment news and events.

Subscribe now

Case study questionnaire

Would you be willing to be a case study in the press?

Complete our questionnaire

Media enquiries

Annabel Brodie-Smith
Communications Director
Tel: 020 7282 5580
annabel.brodie-smith@theaic.co.uk
@annabelbrodies
@aicpress

Laura Thomas
PR & Marketing Executive
Tel: 020 7282 5551
laura.thomas@theaic.co.uk
@aicpress

Elmley de la Cour
PR & Marketing Executive
Tel: 020 7282 5583
elmley.delacour@theaic.co.uk
@aicpress