Casting a cold eye on financial advisers


UNDER THE RADAR: Mark O'Bryne, GoldCore

WE’VE LEARNED the hard way. We’re all far more aware now of risk in the financial markets than two years ago. But how well served were Irish investors by their financial advisers in the run-up to the crash?

Not well at all, maintains Mark O’Byrne, award-winning financial analyst and founder of bullion dealers and asset diversification specialists GoldCore. His criticism is nothing less than scathing.

“As a result of the downturn, we’re seeing the traditional flight to gold as a safe haven in times of macroeconomic or geopolitical turbulence, and that will be positive for our business in the short to medium term,” says O’Byrne (35).

“But in the long term, the sheer magnitude of what’s happened has seriously eroded Ireland’s net value, and in the end that’s undoubtedly going to hamper anyone who sells investments or gives financial advice. It’s bad for all of us.”

O’Byrne is not inclined to let banks, stockbrokers or “so-called financial advisers” off the hook with the apologia that nobody could have anticipated the near-biblical scale of the collapse – an argument he dismisses as spin.

“While it’s true that nobody could have anticipated the extent of what happened, advisers should have been well aware that there is risk in the world. They seemed to have forgotten. They should have been more diligent – and should have ensured there was more diversification.

“Just look at the performance of Irish pension funds during 2008. It was absolutely appalling because they weren’t diversified. Irish funds fell 37.5 per cent on average, while German funds, for instance, fell just 8 per cent.

“German pension fund managers would never have dreamed of putting 60 or 70 per cent of their portfolios into equities – which is exactly what the majority of Irish pension funds did.”

O’Byrne set up GoldCore, Ireland’s first bullion dealer – it was then called Gold and Silver Investments Limited – in 2003, and in 2006 was named Financial Analyst of the Year by Moneymate and the Investor magazines, ahead of other well-known nominees such as Robbie Kelleher and Dan McLaughlin.

In 2008, the company expanded into the UK with an office in the City, and says it had sales of €42.3 million, with customers in more than 30 countries. But accounts filed recently for Goldcore show that profit after tax last year dipped to €50,200 compared to €78,700 in 2007.

Earlier this year it rebranded as GoldCore, offering wealth management as well as bullion services, working on the basis that the bedrock of portfolio performance is asset allocation – and, of course, diversification.

O’Byrne views gold as a commodity to buy and hold for the medium to long term, rather than one for short-term speculation.

And while research by GoldCore, published in June, showed that Irish investors in gold outperformed the Iseq by 316 per cent since the start of the financial crisis in August 2007, O’Byrne strongly recommends a holistic approach for a balanced investment portfolio.

“This is not about bashing property or cash or bonds. We believe all of them are important. But gold has a role to play as a diversification at 10 per cent or maybe 20 per cent max in a holistic portfolio, as a hedge against the rest of that portfolio. “We tend to put all our eggs in one basket: we had them in the property basket, pension funds had them in the equities basket, now we have them in deposits of cash, which is defensive and completely understandable. But in the next two or three years inflation will take off . . . That’s why diversification is essential.”


Name: Mark OByrne

Company: GoldCore

Job: Founder and director

Age: 35

Background: Graduated from UCD in 1996 with a BA in history and Greek and Roman civilisation – and a fascination with economic history. Joined the family recruitment business, Personnel Vineyard, and later began investing in property. In 2003, set up Gold and Silver Investments Limited, Irelands first bullion dealer. In 2008, opened a London office. Rebranded as GoldCore in 2009. Gold hits $1,000 an ounce in September.

Challenges: “Convincing investors that gold is a currency and a safe haven asset rather than something worn by supermodels or the comic book view of a yellow metal thats lusted after by evil pirates.”

Inspired by: “My family. I suppose my primary reason for being in business is to look after my family and my friends. They, in turn, inspire me to do the right thing by my customers.

Most important thing learned so far: “Two things: I studied history, so I suppose it’s that people, unfortunately, have a habit of not learning from the past. The second is never to trust so-called experts. People have to educate themselves and make their own prudent investment decisions.”