Managed Funds Is using a funds manager safe?

I want to use a funds manager to manage some money for me that I need to invest. I have NO IDEA about investing whatsoever.

I found a funds manager who I think I can trust to make the right choices for me but the fact that he has access to my funds scares me. I know some of you don't like the idea of trusting others to make the actual investments (buying and selling on your behalf) but I'm not talking about that. I am talking about theft.

Sorry to be so naive but whats stopping him from moving my money into some account somewhere and skipping the country? Or doing other fraudulent activity that I am not aware of?

I feel that giving him access to my funds to manage is like giving someone the login details to my bank account.

Do I have a legitimate concern?? What is to stop a funds manager being fraudulent and what is in place to protect me?

If I use a funds manager from Commonwealth Bank at least I know the bank will back me if there is any fraudulent activity but what about a normal funds manager that runs his own business then what, am I screwed?


-Frank

 

My experience with managed fund has been average, due to what i can identify now given my greater understanding of investing :

-high fees ( mine was .95%, and the Forager fund suggested above is over 1% + performance fee) ,definitely something for you to consider
-capital gain tax: does the fund trade often or more passive? (mine traded and hence i had to pay tax every year)
-fund size and how long he fund has been around this probably is one risk to factor in ( ie. the larger and longer the fund has been,the less risk ? plus past performance over he long term 10 years or above
- income or growth? does it meet your strategy?

 

As @The Y-man says, educate yourself - lots of reading across the many threads on PC, and sister forum Investchat. I (and many of us I'm sure) are/have used a funds manager.

I read your other post about $1 million to invest and I would put those funds in a deposit earning account (or term deposit if you think you would spend a little of the funds), and do lots of reading and talking and sorting things out on paper across the many options. (yes I realise the interest earned on the $1m in a deposit earning account will add to the tax bill, but I think this is a small price to pay compared to making a wrong choice, that could cost much more).

If you're looking into LICs - Beginner's Guide to Investing in Listed Investment Companies

What's your timeline for getting this set up?

(And for the record, I agree with @Anne11 , my experience with a funds manager hasn't been dazzling, but I'm not tarring them all with the same brush, just educate yourself first so you understand what they are suggesting)

 

Emphasis on the "good". Any tips on how to select one?

 

Great points. The FIS seminars appear to provide broad, general information, which is great to introduce people, rather than diving in the deep end, getting overwhelmed, then making a rassh decision.

Also interested in @Perthguy 's question. My approach is to visit plenty of seminars and ask questions,and interview FPs (although I've had to pay for this option). First of all, plenty of reading! Interested if others have found a FP they have stayed with longer term.