The Long and the Short of It (by John Kay)

Here is the first sentence of the review of John Kay's book by Stephanie Flanders, who is the BBC's economics editor:

"John Kay thinks the modern financial world is greedy, cynical and self-interested, and that we should all shun the professionals and manage our investments for ourselves."

And a few paragraphs later on:

"One word of warning: if you have any investments managed by somebody else – and like it or not, almost anyone with a pension does – this is not going to be a comfortable read. Kay’s point is not that professional investment managers are naturally wicked or corrupt, although, of course, some are. It is that inevitably, by the nature of their business, these people will rarely have your best interests at heart.

For starters, in order to remain professionals, investment managers need to make money out of your investments, regardless of whether they go up or down. You do not. If you manage them yourself, “your bonus is already in your pocket”. The regular FT reader is probably already scandalised by the scale of commissions and management fees in the retail investment industry, never more than when these percentages come on top of the double-digit losses that most investors will have suffered in 2008. But you are probably still not scandalised enough."

My sentiments exactly. John Kay writes an excellent personal finance column in The Financial Times, from which much of the material in the book was adapted.

Here is the url of the book review:

ft.com/cms/s/2/4bf99cdc-e35b-11dd-a5cf-0000779fd2ac.html