If you’re disappointed with your returns from active funds in recent years, spare a thought for active investors in the Netherlands. According to the latest SPIVA scorecard, 100% of Dutch fund managers have underperformed their benchmarks over the past five years; that’s right, all of them. But better news is that the Netherlands is leading the way on transparency, and both Vanguard and Dimensional are busy winning consumers over to the evidence-based approach.
Robert van Beek is a Dutch financial planner and investment author, who recently helped my colleagues and me at Regis Media to produce a Dutch-language version of our video series Six Steps to Successful Investing. I caught up with Robert earlier this week for a brief interview.
Tell me briefly about your professional background and the professional journey you’ve been on.
I started my career in 1991 working for a big bank, and in the year 2000 I started working as an investment adviser and financial planner in the private banking industry. But I’ve always been interested in behavioural economics, in investment research, and in what has been called for the last couple of years or so evidence-based investing. Most people know me from my work with Carl Richards at Behavior Gap. I’ve translated many articles, blogs and columns of Carl’s for publication in Belgium and the Netherlands
The Dutch regulator, the AFM, has taken a lead in the move towards transparent charges. What exactly has it done?
Yes, commission has been banned, in the same way as it was in the UK with the Retail Distribution Review. The Netherlands didn’t want to wait until MiFID II (the new European Directive) to be implemented before taking action. So advisers cannot be compensated financially in any way by product suppliers any more. There are no fees, retainers, trail commissions, or any other cash flows permissible between fund managers and advisers.
The latest SPIVA Europe stats were horrendous for Dutch active managers. Did they come as a surprise to you?
No, it doesn’t surprise me at all. Research has shown many times that there is another story that needs to be told — that there is more to investing than just active investing. The data doesn’t lie. Consumers must be able to make the right choices.
Not all investors are active investors. The same counts for passive. I believe a lot of investors will become dissatisfied if they truly are active investors and are only being offered passive solutions. Investors need to know both stories and find the best fit for them. And for many, of course, this answer should be passive.
How popular is evidence-based investing in the Netherlands?
It all started with a big discussion (on the rival merits of active and passive investing) initiated by the regulator in 2011. Thanks to the efforts of companies like Vanguard and Dimensional, evidence-based investing continues to grow. Think ETFs and smaller asset management firms like Index Capital have also been influential, as have investment entrepreneurs like Jacques Wintermans and Hendrik Meesman. So yes, it’s definitely growing.
What about Belgium?
That’s another story. Passive investing in Belgium is still very new. Only really since the start of this year have you seen stories about ETFs and trackers in the media. Belgian investors still tend to invest mostly in bonds, or else they use home-biased Belgian equity funds. But times can and will change, I’m sure. Small stones dropped in water can sometimes cause big waves.
As you say, you work with Carl Richards. Why do you think Carl’s message resonates so clearly with investors and advisers across the world?
In one sentence, Carl helps people to focus on their life and goals, instead of spending too much of their precious time thinking and worrying about investments.
He helps them to stop doing dumb things with their money. Using inspiring and catchy sketches to do so is really effective. One picture is worth more than a thousand words. The savings crisis is a global problem, and not everybody speaks and understands English. That’s the reason why we’ve translated Carl’s books and produced Dutch versions of his sketches.
And now you’re working with Regis Media on Dutch video content. What made you want to do that?
I see it as my personal goal or mission to look for ways of taking the complexity out of people’s money and investment decisions. And I am convinced that video and animations can produce better results than just words and figures. English is for many people still difficult, and if I see proven ways of communication, with proven results, being developed in other countries, I’m happy to translate them. I also want to share these opportunities with other advisers, because then their clients will benefit from them as well. That way I can reach a bigger group of people.
I am probably more of a right-brainer then a left-brainer, and I believe there are more right-brainers than people realise. People in the financial industry, who live in an environment of numbers and complexity, tend to forget that the rest of us don’t. The advisers I’ve shown the Six Steps series to have been very enthusiastic, so I am excited to see how things develop in the next few months.
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Oh là là! Active funds are a Europe-wide fail
If you’re a financial adviser and you’re interested in either the English or the Dutch version of Six Steps to Successful Investing, carrying your own firm’s branding and contact details, please get in touch with Sam Willet at s.willet@regismedia.com for more information. German-language content is dealt with by Christina Waider at christina@regismedia.com. Alternatively you can call them on +44 (0)121 285 2585.
Robin is a journalist and campaigner for positive change in global investing. He runs Regis Media, a niche provider of content marketing for financial advice firms with an evidence-based investment philosophy. He also works as a consultant to other disruptive firms in the investing sector.
