Earlier this month I tried to get on the Clapham Omnibus going to Investment, but it stalled at the first stop. What am I referring to? The People’s Trust which I mentioned in my first blog. This was a new investment trust (find out what an investment trust is here) that failed to raise the minimum £125m it needed to be a viable fund. So, how did I, a self-declared reasonable person (the definition of the man on the Clapham Omnibus according to Wikipedia), end up trying to invest in something called the People’s Trust?
Trust the people
I’d read about the People’s Trust in the Times some months ago and thought it sounded like a good thing and decided to become one of the 2,500 founder members by donating £20. I did this because I’m always interested in businesses that are trying to be disruptive, trying to do things differently and hopefully better (more about this when I cover investing in shares and crowd funding) and, yes, because I thought I might get a discount on the share price when launched. I should add the obvious: I have money to invest, though this is for the saddest reason possible — both my parents died in the last year and I have just completed DIY probate for them both (more about this in future blogs) so I now have my inheritance.
Doing things differently is what the People’s Trust was trying to do in the investment world. As their strategy said, their ‘objective (was) to make long-term, high conviction investments that deliver sustainable wealth creation’. While the objectives and values of the trust (which included some sensible consumer-friendly requirements like banning excessive bonuses, transparent charges and a 7-year outlook) struck a chord with direct investors like me, it didn’t gain enough support from institutional investors, discretionary wealth managers and the like.
One of the main reasons cited for their lack of interest was the relatively high fee (1.1%). For me, this was not a major factor as you usually have to pay something to get something — in this case what may have been better performance over the longer term. Although it was well priced for a direct actively managed investment, wealth managers add their own fees and charges on top (advice fees, platform fees etc), so costs would have soon stacked up. However, ordinary people did trust in the People’s Trust with substantial sums being pledged by investors like me. So maybe there is something in what the People’s Trust was trying to do… if only more people understood about the benefits of investing rather than squirrelling their money into pointless cash ISAs with very low interest rates.
Trust issues
One thing’s for sure, people can’t trust broadband firms. I’m still pondering what to do about my often useless broadband service. I have Virgin Media because cable supposedly has the best speed. But almost every time I sit down to watch something on the BBC IPlayer, it lags.
I’ve put up with it for a while, but I now have another reason to think carefully about what to do about this as Virgin Media has just written to say my monthly bill would increase by £3 to £50 from November — this despite the fact I signed up to an 18-month contract at £47 per month just 11 months ago. And the new price of £50 is just for broadband/wifi, landline rental and most landline phone calls (yes, we still use the landline) but no premium TV.
The rational person on the Clapham Omnibus ought to think SWITCH. But a reasonable person will probably think:
- I’ve got better things to do than worry about £3 more to pay
- The service might be worse with another firm seeing as cable is meant to be best
- I can’t be bothered
Find out next month what I did with my broadband and the four-figure sum I got back from the People’s Trust. I won’t be investing in Virgin Media…
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