Do any financial products make a contribution to your personal financial management at a price you are prepared to pay?
We have brought you to a style of personal financial management based entirely on assets. Assets are the building blocks of investment. Products are only assemblages of those building blocks. The question you must ask of products is: do they help you to carry out your financial plans?
We make no secret of our belief that there is a strong case for ignoring products entirely (with the possible exception of trackers with extremely low charges). This is not because there are no good products; it is because there are so many bad products and you cannot chose between the good and the bad.
There is a whole section of this site devoted to the consequences of choosing products. You should browse this before making any decision. The key points for us are:-
- Costs are critical. Do Costs Matter?
- Good products offer you convenience or a service which is worth something to you. Understand what you are paying for the service and make your own judgement. Costs Unwrapped
- Do not pay for outperformance: a) it is extremely rare, on a consistent basis, b) it is impossible to recognise until it is too late. Star Managers
- If a product is not clear about its costs or its investment strategy, bin it. In short, opacity is a crime and a warning.
- If a product locks you in (typically through exit penalties), or has the capacity to lock you in, you need to consider very carefully whether you trust the product provider not to adversely change either its costs or its investment strategy.
- Remember you are not being offered altruism: you are being sold. Hype, Misleading Media
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