The Evidence-Based Investor

Pete Matthew and yours truly set the world to rights

Posted by Robin Powell on January 3, 2018

It’s hard to keep track of all the podcasts out there about investing and personal finance, but there are a few that are definitely worth listening to. One of them is Pete Matthew’s MeaningfulMoney Podcast.

Pete Matthew is a Chartered Financial Planner, based in Cornwall, and one of the key thought leaders in this space in the UK. He interviewed me for his latest episode, in which we discuss:

— evidence-based investing (what it is and what it means for investors);

— why the financial media has an important part to play in investor education;

— how financial advisers have been misled by the big fund houses in the past but are slowly coming round to the evidence-based approach; and

Regis Media’s new documentary for RockWealth LLP, Investing: The Evidence.

Here are some of the highlights:

 

Evidence-based investing

“When you go to a doctor you assume that they’ve read the evidence about what will make you better. But, after all this time, a lot of investing is just based on opinions, hunches and relationships. It seems very odd, in 2018, that we’re still talking about this.”

“The Evidence-Based Investor is about confronting people with the evidence about investing. I was getting increasingly frustrated that the conversation is dominated by conflicted organisations with products to sell. TEBI filled a gap that desperately needed filling.”

 

The financial media

“I don’t particularly blame journalists. I’m a journalist myself. I know how it works. Readers don’t want to hear every week that the best thing to do is to keep your costs low, diversify and rebalance.”

“Advising your readers every week to keep their costs low, diversify and rebalance is not a recipe for selling newspapers. I liken it to dieting. We all know the best way to lose weight is to eat less and exercise more. But we’re much more interested in stories about shortcuts.”

 

Financial advisers

“I don’t want to criticise advisers because, in many ways, they are the most important link in the value chain. But, in the past, it has suited advisers to recommend actively managed funds. Before RDR, advisers were paid commissions to do so.”

“Even post-RDR, there are incentives for advisers to use actively managed funds. It’s simpler to explain to people; its more interesting; it gives them something to talk about; and it makes them sound clever.”

“A lot of advisers are waking up to the fact that they have been misled by the big fund management companies in the past and that they should be moving over to evidence-based. One reason why they don’t is they don’t want to say to their clients, the way I’ve been doing it all these years is not the way to do it after all.”

 

You can listen to my podcast interview with Pete Matthew here:

MMP240 — Investing: The Evidence

 

Evidence-based adviser?

The Evidence-Based Investor is produced by Regis Media, a boutique provider of high-quality content and social media management for evidence-based advice firms. For more information about what we do, visit our website or YouTube channel.

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Robin Powell

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. Regis Media.

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