Beware of rapacious sales strategies

You need to keep your wits about you when dealing with the finance industry, says Merryn Somerset Webb. Too many of them exist to sell to you, not to advise you.

The finance industry, said Aberdeen Asset Management veteran Hugh Young when I interviewed him recently, is essentially "venal". Sometimes people (usually senior bankers) try to persuade me this isn't so that they care for the community, for ethical behaviour and for social cohesion as much as for money. But it is never long before something happens to remind me that finance really is just that bit more corruptly mercenary than most industries.

One example surfaced in Jonathan Eley's column in the Financial Times last weekend. Regular readers will know that we have been pleased to see most of the big fund managers produce 'RDR-ready' versions of their fund charges. In the past, all fund managers have contributed towards the corruption of the advice industry by paying commission to advisers (both up front and as trail' commission) who manage to flog their products to clients. The regulator's Retail Distribution Review rules ban this from next year, so RDR-ready essentially just means "with soon-to-be-illegal commission payments stripped out". The result? Funds that charge management fees of more like 0.5%-0.75% a year than the usual 1.5%.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.