Check out what’s happening in the world this week, plus what it means for you and your investments. (3:26 min read)

This information does not take into account your personal objectives, financial situation or needs. You should consider if the relevant investment is appropriate having regard to your own objectives, financial situation and needs.

 

1. Financial planners face the music

The Royal Commission into the financial services sector has brought more wrongdoings to light; this time it’s financial planners in the spotlight.

The misconduct uncovered so far involves charging fees for services that weren’t provided, or as Commissioner Haynes so aptly stated:

“Selling what you can’t deliver, selling what you won’t deliver, and selling what you don’t deliver”.

 

What does this mean if you have a financial planner or you are considering seeing one?

The large financial institutions – namely the big four banks and AMP – all provide investment services and financial planning.

Financial planners are supposed to act in the best interests of their clients. However, for those who are part of larger financial institutions, it can be a tough expectation to uphold.

They’re also expected to act in the best interests of their employer, and these competing objectives often results in pushing clients toward in-house products.

We believe anyone seeing a financial planner, particularly if affiliated with or owned by a large financial institution, should carefully consider the independence of the advice they receive.

 

What does this mean if you’re invested money with AtlasTrend?

We believe the best defence against poor financial advice is being armed with as much relevant financial knowledge as you can absorb.

You’ll be far more equipped to hold the advisor accountable, and challenge any questionable advice.

This applies across all facets of finance, particularly when you’re fronting up large sums of cash. It’s why we created The Atlas, so our members can empower themselves with knowledge and become financially savvy.

 

2. Congress grills Zuckerberg but forgets to do their homework

Facebook founder and CEO, Mark Zuckerberg, recently faced the US Congress to answer questions following the Cambridge Analytica data breach.

Markets were concerned Congress would rip into Facebook’s business model, and pile on the pressure regarding user privacy.

 

What does this mean if you’re invested in Facebook shares?

Overall, it appeared Zuckerberg spent much of his time explaining the concept of social media and how Facebook works to members of Congress.

One particular Senator even asked how Facebook remains a free service, to which Zuckerberg replied “Senator, we run ads” while trying to remain straight-faced.

The market breathed a sigh of relief when Congress didn’t give Zuckerberg the grilling they expected, with Facebook’s stock price rising 5% during his two days of testimony.

 

What does this mean if you’re invested money with AtlasTrend?

Some of AtlasTrend’s managed funds are invested in technology shares in the US.

We believe the questions asked by members of Congress revealed an education gap among lawmakers. It seems they’ve got a lot to learn before they can sensibly regulate technology companies like Facebook.

It’s likely to be welcomed news for tech investors as it gives companies a chance to self-regulate. If Congress is assured companies are acting in the best interests of its users, it should help reduce the severity of any future regulations.

 

3. Active vs passive investing

Spaceship, an Australian fintech and millennial-focused superannuation product, has recently been fined by ASIC.

The technology-orientated super fund was charged for ‘false or misleading conduct’ because they were mostly invested in index funds, while their website and marketing messages suggested otherwise.

 

What does this mean if you’re a stock market investor?

One of the most hotly debated investing topics is whether to invest actively (managed fund) or passively (index fund). In Spaceship’s case, 79% of the advertised Growth X fund was investing in index funds meaning there was “no qualitative analysis of the underlying companies”.

You could liken it to being at a restaurant and ordering every single item from the menu. Whereas an active investor would order only select items from the menu in an attempt to have the best possible dinner.

 

What does this mean if you’re invested money with AtlasTrend?

We’re a team of active fund managers, it’s where most of our experience lies collectively investing $2 billion over the course of our careers.

We believe in active investing as the better approach when investing in global themes as it’s not just a matter of picking everything on the menu. It requires detailed thought, research and execution to ascertain which stocks may benefit from a particular theme.

  

For more about the types of managed funds AtlasTrend provides, click here. Sign up for full details on what the Trends invest in, and access actionable investing insights.