Fund Managers, Stockbrokers Collaborate to Deepen Investors’ Patronage

Fund managers are working with stockbrokers to deepen the patronage of collective investment schemes (CIS) in the capital market. While CIS are said to be better investments for retail investors, the patronage is low due to the limited spread of fund managers.

However, President of Fund Managers Association of Nigeria (FMAN), Dr. Ore Sofekun has disclosed that the association is working with the Association of Stockbroking Houses of Nigeria (ASHON) so that stockbrokers can market CIS to their customers.

“The stockbrokers are closer to investors and we are discussing with ASHON, so that their members can help sell the some of the funds,” she said.

The FMAN had last week advised investors to always diversify their investments and use registered fund managers for safety and better returns.

According to Sofekun, there funds that are targeted at money market instruments and others that are targeted at capital market instruments.

She explained that while investments in funds that play in the money market give safer returns in the short run, investments in funds that are in the capital markets fetch higher returns on the long run.

She therefore, advised the best strategy is portfolio diversification.

“For investors, what I will say is that the money market is very safe because the principal will never change and you are sure of your interest. So that is the safest investment you can make. If you see what has happened to equities now, the stocks are doing quite well. So don’t put all your money into either stocks or fixed income alone. You need to diversify. Put any money you will need within the next two years in a money market fund. But for the money you are saving for children’s school fees in the next 10 years, you can put that in equities because those are the ones that will give you the best returns,” the FMAN president said.

Sofekun noted that while the industry is growing, with asset under management (AUM) over N300 billion as at December 2016, she added that the association is working hard to ensure more growth.

“The industry is growing, but it could do a lot better. So we really want to make sure that we push hard and want to support our members and tell the world how safe investment schemes are and the role of fund managers in making sure that people reach their investment destinations,” she said.

She stressed that investors can build their wealth using a fund managers instead of patronising Ponzi schemes that will lead to losses.

“As an industry, we want to assure the public that anytime you want to invest, make sure you use a fund manager. People have lost their money in Ponzi schemes such as MMM. Anybody who approaches you with outrageous return, is probably going to take you for a ride. But if you build your wealth with a fund manager, it is better for you on a long run,” the FMAN president declared.