# Handing your money over to a fund manager...



## MrBurns (14 May 2012)

What safeguards are there in place if you decide to put money with a fund manager such as Nick Radge, I've only ever heard of him recently I can Google him to find out more but when it's all said and done if I were to deal with him I'd be handing over hundrens of thousands of dollars to a man I don't know, unlike with a TD at a bank you're dealing with a bank so you don't give it a second thought.

What's is to stop a fund manager transfering everyones money into a Swiss bank account and disappearing.


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## Testpilot (14 May 2012)

Why not just buy one of Nick's systems? I don't personally trade Nick's stuff because I've got better systems but I have backtested some of the systems in his latest book and they work pretty much as described.  Then you'd still have control over your money if that is a key concern. I'll admit that there are many dodgy people out there looking to capitalise on naivety but in my dealings with Nick he's been honest and transparent in the risks and rewards of his products.


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## MrBurns (14 May 2012)

Testpilot said:


> Why not just buy one of Nick's systems? I don't personally trade Nick's stuff because I've got better systems but I have backtested some of the systems in his latest book and they work pretty much as described.  Then you'd still have control over your money if that is a key concern. I'll admit that there are many dodgy people out there looking to capitalise on naivety but in my dealings with Nick he's been honest and transparent in the risks and rewards of his products.




I'm not doubting Radge just the whole idea of handing your money to an individual.
Stock broker is different I guess.


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## lenny (14 May 2012)

If this worries you then just subscribe to the growth portfolio and place the trades yourself.

Easy $660 bucks a year.


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## MrBurns (14 May 2012)

lenny said:


> If this worries you then just subscribe to the growth portfolio and place the trades yourself.
> 
> Easy $660 bucks a year.




Yep that too but the question still remains, what safeguards are there, or arent there any ?


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## skc (14 May 2012)

MrBurns said:


> I'm not doubting Radge just the whole idea of handing your money to an individual.
> Stock broker is different I guess.




From what I can see with Radge it's a IMA (individually managed account) which should be an account with your name, but with transaction authority provided to the manager. You should be able to see what's happening to the account on a continuous basis.

It's still entirely possible for someone to steal money from these accounts, much like people can steal money from brokers, financial advisers, managed funds (e.g. Madoff) and even banks (although it will probably be made good by bank's insurer). 

Your safeguards include due diligence beforehand (i.e. verify that they've been around a long time, not under ASIC investigation, speak with past investors etc), ongoing monitoring, 3rd party insurance (if available), and may be diversification (i.e. split up your wealth between several mangers).


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## tech/a (14 May 2012)

MrBurns said:


> Yep that too but the question still remains, what safeguards are there, or arent there any ?




How do you mean?

Once your a member you have everything disclosed
Buy
Sell
Trade management
You use your money
Your broker

What safeguards to you want.


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## MrBurns (14 May 2012)

tech/a said:


> How do you mean?
> 
> .




I mean if you just draw a cheque for say half a mill to a fund manager , how do you know its safe ?


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## Trembling Hand (14 May 2012)

MrBurns said:


> I mean if you just draw a cheque for say half a mill to a fund manager , how do you know its safe ?




MrBurns I really cannot believe that you are so lazy to think about doing such a thing yet have not started with the actually source as to what the process is?

I'm sure if you approached the people you would get exact answers as to protection and expected max drawdown etc.


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## MrBurns (14 May 2012)

Trembling Hand said:


> MrBurns I really cannot believe that you are so lazy to think about doing such a thing yet have not started with the actually source as to what the process is?
> 
> I'm sure if you approached the people you would get exact answers as to protection and expected max drawdown etc.




Sorry your post seems a bit jumbled.

But I'm just asking a theoretical question and haven't got an answer that would allow anyone to feel comfortable handing money over to a fund manager, especially a small operator.


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## Trembling Hand (14 May 2012)

MrBurns said:


> But I'm just asking a theoretical question and haven't got an answer that would allow anyone to feel comfortable handing money over to a fund manager, especially a small operator.




Well as you seem to know so little, that is you have *no *info, I can only guess as to what you are talking about. My guess; you are talking about his managed accounts. If that is so you do not hand over any money. It all stays in your name in your brojkerage account.

But still my point is why don't you ask them?


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## MrBurns (14 May 2012)

Trembling Hand said:


> It all stays in your name in your brojkerage account.
> 
> But still my point is why don't you ask them?




Well that makes some sense.

I don't usually ask the person i'm checking on if they are ok, I might not get aindependentnt answer.

I would have thought there are plenty in here who have done this and would have an opinion.


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## CanOz (14 May 2012)

Mr.Burns there will always be counter party risk in whatever you do with your money. You always have to go through a middle man to invest or trade. Sometimes these guys go bust, as in MF Global.

Don't put all your eggs in one basket, invest a portion in one strategy, another portion in fixed income. My opinion of course, you need to make this judgement yourself.

I handed my Canadian Pension over to a fund manager, i told him 1/3 in CLO, then the other 2/3 in Canadian bank ETFs and Agri ETFs...its a long term view. But I'm in cash in my Australian Super at the moment, as are our savings. It would never be in one place, one , market.

Good luck!


CanOz


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## So_Cynical (14 May 2012)

MrBurns said:


> I mean if you just draw a cheque for say half a mill to a fund manager , how do you know its safe ?




You don't...its a punt, like every thing else in life...even a TD is a punt, a punt on will the interest beat inflation, will rates rise or fall, will the currency of the TD rise or fall...will the interest from the TD beat an index ETF like STW. :dunno:

If you are determined to go with hands off investing and are worried by 1 manager risk, then spread the half mill over 5 or so managers with different styles...i have shares in PTM and HHL 

http://www.platinum.com.au/ (Stock picking non Aussie stocks etc)
http://www.hunterhall.com.au/index.html (ethical value investors)
https://www.allangray.com.au/ (formally Orbis Funds)(contrarian investment)
http://www.blueskyfunds.com.au/index.html (Alternative Investments) 
http://brontecapital.com/ (something different)

Not recommendations, just some examples to give you something to think about.


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## MrBurns (14 May 2012)

So_Cynical said:


> You don't...its a punt, like every thing else in life...even a TD is a punt, a punt on will the interest beat inflation, will rates rise or fall, will the currency of the TD rise or fall...will the interest from the TD beat an index ETF like STW. :dunno:
> 
> .




I'm talking about someone taking off with your cash not the security of the investment.


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## Trembling Hand (14 May 2012)

MrBurns said:


> I'm talking about someone taking off with your cash not the security of the investment.




This is why I said you are lazy. You haven't even look into the *basics*. If its a managed account its stays in your name. Like any account NO ONE else can withdraw the funds.

Please make a call and find out for yourself.


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## So_Cynical (14 May 2012)

MrBurns said:


> I'm talking about someone taking off with your cash not the security of the investment.




So am i...its all part of the risk profile, the odds that 5 fund mangers will run away with your money all at the same time are a gazillion to one.


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## MrBurns (14 May 2012)

Trembling Hand said:


> This is why I said you are lazy. You haven't even look into the *basics*. If its a managed account its stays in your name. Like any account NO ONE else can withdraw the funds.
> 
> Please make a call and find out for yourself.




It stays in an account in my name ok, but the fund manager has access to it so there's the risk.

Look if you dont know the answer just say so, dont harp on about me being lazy.

I *AM* looking into the basics by asking the question here, it's not rockeet sciance, you either know or you don't.


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## MrBurns (14 May 2012)

So_Cynical said:


> So am i...its all part of the risk profile, the odds that 5 fund mangers will run away with your money all at the same time are a gazillion to one.




If there was any chance of that I wouldn't bother, I thought there may be some regulatory safeguard.


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## Trembling Hand (14 May 2012)

MrBurns said:


> It stays in an account in my name ok, but the fund manager has access to it so there's the risk.
> 
> Look if you dont know the answer just say so, dont harp on about me being lazy.
> 
> I *AM* looking into the basics by asking the question here, it's not rockeet sciance, you either know or you don't.





LOL!!

Last time. They have trading permission. That is it. They cannot withdrawn funds. Again!!


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## MrBurns (14 May 2012)

Trembling Hand said:


> LOL!!
> 
> Last time. They have trading permission. That is it. They cannot withdrawn funds. Again!!




For the last time ??? Thats the first time you've said that, that's all I wanted to know.


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## CanOz (14 May 2012)

Trembling Hand said:


> LOL!!
> 
> Last time. They have trading permission. That is it. They cannot withdrawn funds. Again!!




They're basically trading your account for you MR.B. It would be like you giving me access to your brokerage account to place trades for you. I can't withdraw any funds, and you have full visibility to what i am doing. You just don't have to worry about managing the trading activity. 

Simple, effective, convenient. 

CanOz


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## MrBurns (14 May 2012)

CanOz said:


> They're basically trading your account for you MR.B. It would be like you giving me access to your brokerage account to place trades for you. I can't withdraw any funds, and you have full visibility to what i am doing. You just don't have to worry about managing the trading activity.
> 
> Simple, effective, convenient.
> 
> CanOz




Thanks canoz, thats all I wanted to know.


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## Sir Osisofliver (14 May 2012)

MrBurns said:


> What safeguards are there in place if you decide to put money with a fund manager such as Nick Radge, I've only ever heard of him recently I can Google him to find out more but when it's all said and done if I were to deal with him I'd be handing over hundrens of thousands of dollars to a man I don't know, unlike with a TD at a bank you're dealing with a bank so you don't give it a second thought.
> 
> What's is to stop a fund manager transfering everyones money into a Swiss bank account and disappearing.




It sounds like an SMA. AFSL licence is required, constitution and Responsible manager in order to run the structure as a MIS. Likely to be a PDS which will detail the legals. Usually those documents will let you know where the risks lie.

In answer to your specific question. Professional integrity.


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## skc (14 May 2012)

CanOz said:


> They're basically trading your account for you MR.B. It would be like you giving me access to your brokerage account to place trades for you. I can't withdraw any funds, and you have full visibility to what i am doing. You just don't have to worry about managing the trading activity.
> 
> Simple, effective, convenient.
> 
> CanOz




How do they take the fees out? Or you pay them separately?


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## CanOz (14 May 2012)

skc said:


> How do they take the fees out? Or you pay them separately?




Good question SKC, no mention of that but I'm sure Mr.B can ask Nick how that is done.

Cheers,


CanOz


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## basilio (14 May 2012)

Professional integrity...

Sir Ossie hit it in one. If the guy is honest there should be no problem (apart from possibly losing your money through poor trades and/or costs) 

But if things turn sour I think I would want to have a closer hand on the moola. 

___________________________________________________________________________________

I had a look at his website and it does look like an enticing arrangement.   But it has been operating for only 12 months. Early days.


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## skc (15 May 2012)

basilio said:


> I had a look at his website and it does look like an enticing arrangement.   But it has been operating for only 12 months. Early days.




The portfolio goes to cash in bear market which is wise. You pay 15% performance fee above benchmark which is the ASX200 ETF. I wonder if you pay performance fee if the benchmark return is negative. 

E.g. Benchmark down 20%, your account is flat. That's 15% fee on the 20% out-performance... i.e. 3%.

Something for Burns to ask Radge I guess.


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## tech/a (15 May 2012)

basilio said:


> Professional integrity...
> 
> Sir Ossie hit it in one. If the guy is honest there should be no problem (apart from possibly losing your money through poor trades and/or costs)
> 
> ...




Known Nick 20 yrs
Is fully licensed.
Vigorously guards his integrity
Has traded live his methods right through 
The difficult periods.
His fees are in my view more than reasonable.

The biggest plus is Nick is a family man
Who has always been and remains very
Approachable.

I understand your concerns and so does Nick.
That's why he has set this up so that both you and he
Are at arms length.

Give him a call.


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## Trembling Hand (15 May 2012)

MrBurns said:


> For the last time ??? Thats the first time you've said that, that's all I wanted to know.



 First time no. 


Trembling Hand said:


> This is why I said you are lazy. You haven't even look into the *basics*. If its a managed account its stays in your name. Like any account NO ONE else can withdraw the funds.
> 
> Please make a call and find out for yourself.






Trembling Hand said:


> LOL!!
> 
> Last time. They have trading permission. That is it. They cannot withdrawn funds. Again!!




If its the same setup that I have with IB the commissions can setup as a agreement/rule that IB administer. All pretty safe and simple. Very transparent and if you look into you may find its also has insurance against fraud to 1 mil.

But of course you would want to find this out for yourself


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## MrBurns (15 May 2012)

Trembling Hand said:


> First time no.
> 
> But of course you would want to find this out for yourself




Yes I guess there no point asking in here, might as well talk to the cat

They use Macquarrie, not keen on them for some reason but who knows, opps sorry that wasnt a question.


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