Skipton Financial Services
Thursday, October 25, 2018 - 13:41

Who's managing your investments?

Change can sometimes be a good thing. But when it comes to your investment funds, even the slightest shift could throw you off course and impact on your financial goals.

One change that can occur with any fund is when the business group it belongs to merges with another. Usually, the reason behind this is to create a stronger, combined firm which can take advantage of future opportunities. But as an investor of a fund within one of these firms, it can trigger all sorts of questions.

If you’re unsure whether your fund has been affected by changes like this, it’s really important to find out. Because such alterations could mean your money may no longer be working how you want it to – which may prevent you from achieving your financial goals.

To help you develop a clearer understanding of what happens when a fund group joins forces with another, here Skipton’s Technical Research Manager, Daniel Howard, provides an explanation:


Skipton’s Technical Research Manager, Daniel Howard

What key changes typically occur when a firm merges?

Daniel explained, “Usually when two firms come together, resources are rationalised.

“For instance, both companies will have separate investments teams – who may work completely adversely from one another, and have contrasting investment outlooks and strategies. Once the companies merge, only one team may be needed.

“It’s then the firm’s mission to determine which team is the strongest – and select professionals within each team that they would deem to be the most valuable.”

So why could this be an issue?

“The funds in which our customers invest in are heavily influenced by their fund manager and investment team – who play an integral role in operating the fund, and making crucial decisions over its strategy,” Daniel added.

“Stability is crucial for any investment team managing a fund. When a restructure occurs, the overall dynamic may alter, and change a fund’s strategy along with many other factors. As a result, the fund may no longer be suited to a person’s individual investment approach – and possibly prevent them from achieving their goals.”

How do we manage a merger?

Daniel confirmed, “Unfortunately, we don’t get to find out about a merger until it’s officially announced. However, as soon as it is, we’d speak to both companies immediately for further information – asking questions as early as possible.

“Once a merger has been confirmed, it can take years for changes to be established. Therefore, we may not have a clear indication straight away as to whether our customers have been affected.”

Have your investments been affected by a merger?

If you don’t know the answer to this, we can help you find out. We can also take a look at other factors that may have impacted on your investments – such as a change to your personal circumstances.

Doing this now can help us to make any necessary adjustments, which could make a valuable difference to your financial future.

Our recommendations are likely to include stock market-based investments, which place your capital at risk and you may get back less than you invested.

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