Should I be worried about my pension?
Discussion
Just checked my pension plan and 13 years in it's only 8% up on what I've contributed. Should I be worried or is that normal for about half way through it's life? I know spot valuations aren't a true reflection of your final pension and that it grows more towards the end but 8% over 13 years seems pretty rubbish to me.
Most of the increase has come from one fund which is up 43% The others are all single digit or negative. Even the balanced managed fund is -2% over the life of the pension and that's supposed to be the low risk one that I'm putting 50% into.
My financial adviser is next to useless. He only meets me when I chase him for about 6 weeks and then just seems to pick a couple of funds at random and tells me to switch to get me off his back. Last time I even had to do the switch myself as I gave up chasing him for the paperwork.
If I go to a new IFA he'll just try to sell me a new pension. Last time I did that I ended up with this one plus the old one just got eaten up by charges as I closed it early.
I'm starting to get worried now as I already got shafted on an Abbey Life pension which is worthless but fortunately was only in it for 2 years. This one I've had for 13 years and I'm running out of time to sort things out.
Most of the increase has come from one fund which is up 43% The others are all single digit or negative. Even the balanced managed fund is -2% over the life of the pension and that's supposed to be the low risk one that I'm putting 50% into.
My financial adviser is next to useless. He only meets me when I chase him for about 6 weeks and then just seems to pick a couple of funds at random and tells me to switch to get me off his back. Last time I even had to do the switch myself as I gave up chasing him for the paperwork.
If I go to a new IFA he'll just try to sell me a new pension. Last time I did that I ended up with this one plus the old one just got eaten up by charges as I closed it early.
I'm starting to get worried now as I already got shafted on an Abbey Life pension which is worthless but fortunately was only in it for 2 years. This one I've had for 13 years and I'm running out of time to sort things out.
Your story is so depressingly common that it would probably be fair to say it's typical.
Pretty much mirrors my experience, tho' if it's any consolation your 8% beats mine. Mine managed to have grown to be the same as I'd put in after 13 years including the mythical tax incentives. So yeah, yours is pretty good really.
The problem is, we (and there are multitudes of us) don't really know what we're doing.
I have come to accept this as the problem which has led to our disappointment.
We thought that all we had to do was keep up the contributions, usually as advised by the salesman, and some big-brained Mekon in a London office full of screens and telephones would move our money around and make sure it grew at a reasonable rate, compounding into an adequate enough wedge to ensure we lived like normal human beings when we were too old to work.
This is NOT how it works. Actually nobody knows how it works, and if they do they're not telling. There's another school of thought which says it just doesn't work at all (except by chance or fortune). I kind of tend towards that latter camp.
However. It can be assumed that you do something well enough for it to produce the ability to make the contributions in the first place. MY advice ( assuming you can't get directed to the Magic Pension Money Tree ) is use your money to do more of what you already do successfully.
Hopefully that's an option for you. It certainly worked for me, and I have no regrets in putting very little faith in private pension plan contributions as a way to ensure anything more than a (in my case very small) part of funding retirement.
(There will be other opinions on the matter).
Pretty much mirrors my experience, tho' if it's any consolation your 8% beats mine. Mine managed to have grown to be the same as I'd put in after 13 years including the mythical tax incentives. So yeah, yours is pretty good really.
The problem is, we (and there are multitudes of us) don't really know what we're doing.
I have come to accept this as the problem which has led to our disappointment.
We thought that all we had to do was keep up the contributions, usually as advised by the salesman, and some big-brained Mekon in a London office full of screens and telephones would move our money around and make sure it grew at a reasonable rate, compounding into an adequate enough wedge to ensure we lived like normal human beings when we were too old to work.
This is NOT how it works. Actually nobody knows how it works, and if they do they're not telling. There's another school of thought which says it just doesn't work at all (except by chance or fortune). I kind of tend towards that latter camp.
However. It can be assumed that you do something well enough for it to produce the ability to make the contributions in the first place. MY advice ( assuming you can't get directed to the Magic Pension Money Tree ) is use your money to do more of what you already do successfully.
Hopefully that's an option for you. It certainly worked for me, and I have no regrets in putting very little faith in private pension plan contributions as a way to ensure anything more than a (in my case very small) part of funding retirement.
(There will be other opinions on the matter).
drainbrain said:
Your story is so depressingly common that it would probably be fair to say it's typical.
Pretty much mirrors my experience, tho' if it's any consolation your 8% beats mine. Mine managed to have grown to be the same as I'd put in after 13 years including the mythical tax incentives. So yeah, yours is pretty good really.
The problem is, we (and there are multitudes of us) don't really know what we're doing.
I have come to accept this as the problem which has led to our disappointment.
We thought that all we had to do was keep up the contributions, usually as advised by the salesman, and some big-brained Mekon in a London office full of screens and telephones would move our money around and make sure it grew at a reasonable rate, compounding into an adequate enough wedge to ensure we lived like normal human beings when we were too old to work.
This is NOT how it works. Actually nobody knows how it works, and if they do they're not telling. There's another school of thought which says it just doesn't work at all (except by chance or fortune). I kind of tend towards that latter camp.
However. It can be assumed that you do something well enough for it to produce the ability to make the contributions in the first place. MY advice ( assuming you can't get directed to the Magic Pension Money Tree ) is use your money to do more of what you already do successfully.
Hopefully that's an option for you. It certainly worked for me, and I have no regrets in putting very little faith in private pension plan contributions as a way to ensure anything more than a (in my case very small) part of funding retirement.
(There will be other opinions on the matter).
You've come to basically the same conclusion I've come to. Gutting isn't it? Pretty much mirrors my experience, tho' if it's any consolation your 8% beats mine. Mine managed to have grown to be the same as I'd put in after 13 years including the mythical tax incentives. So yeah, yours is pretty good really.
The problem is, we (and there are multitudes of us) don't really know what we're doing.
I have come to accept this as the problem which has led to our disappointment.
We thought that all we had to do was keep up the contributions, usually as advised by the salesman, and some big-brained Mekon in a London office full of screens and telephones would move our money around and make sure it grew at a reasonable rate, compounding into an adequate enough wedge to ensure we lived like normal human beings when we were too old to work.
This is NOT how it works. Actually nobody knows how it works, and if they do they're not telling. There's another school of thought which says it just doesn't work at all (except by chance or fortune). I kind of tend towards that latter camp.
However. It can be assumed that you do something well enough for it to produce the ability to make the contributions in the first place. MY advice ( assuming you can't get directed to the Magic Pension Money Tree ) is use your money to do more of what you already do successfully.
Hopefully that's an option for you. It certainly worked for me, and I have no regrets in putting very little faith in private pension plan contributions as a way to ensure anything more than a (in my case very small) part of funding retirement.
(There will be other opinions on the matter).
ringram said:
In all likihood your are being raped on fee's
Go into detail on the costs and review what you are spending your money on.
You might/likely will be better off moving it into a SIPP where you can run at close to zero cost instead.
I've got a handle on fees. I get a transaction listing of all the buys and sells each year (which they don't provide - I have to ask for it) and track in it an accounting package. The fees aren't that bad compared to what my old (shut down) pension is charging. It just seems to be genuinely poor performance.Go into detail on the costs and review what you are spending your money on.
You might/likely will be better off moving it into a SIPP where you can run at close to zero cost instead.
Transferring is not an option as I'll loose a huge chunk in surrender value. My thoughts at the moment are to shut it down, take a hit on the ongoing fees that will attract, and put the contributions into a low risk tracker fund. Can't do any worse than the pension is doing now.
NRS said:
What funds do you have and what are the charges on them? Also how old are you (for understanding like risk you should have)?
These are the funds I'm in:OMI IM EUR BALANCED
OMI IM USD BARING E EUROPE EUR
OMI IM USD INV ASEAN EQ EUR
OMI IM EUR HSBC EUROLND EQ
OMI IM USD BLACKROCK LATAM EUR
OMI IM USD FID GLOBAL DIV EUR
Charges seem to average about £10 a month. Of course I can't see what charges are included in the fund prices. Just what is deducted by selling units. I'm 44.
Edited by t1grm on Tuesday 10th January 14:29
t1grm said:
Even the balanced managed fund is -2% over the life of the pension and that's supposed to be the low risk one that I'm putting 50% into.
These are the funds I'm in:
OMI IM EUR BALANCED
Thats your problem. From its peak in June 2015 its down near enough 30%. Its one thing to hang in and not sell but another entirely to continue pouring 50% of your contribution in.These are the funds I'm in:
OMI IM EUR BALANCED
I'd reassess that soonest.
trickywoo said:
Thats your problem. From its peak in June 2015 its down near enough 30%. Its one thing to hang in and not sell but another entirely to continue pouring 50% of your contribution in.
I'd reassess that soonest.
Yeah maybe I need to look at that. The thing is that was supposed to be the low risk "banker" where I put the 50% to be left alone. Then I can chop and change the other 50% into stuff more high risk. Great strategy that turned out to be. And the IFA never even looked at it. He just focused on swapping the higher risk 50% into new funds each time we met.I'd reassess that soonest.
Next question is do I try and set up a meet with the IFA and explain I want out of OMI IM EUR BALANCED or just pick a low risk fund that's doing well and make the switch myself? Can't see it being that difficult and at least the blame is on me if I get it wrong. The IFA seems to have got it wrong already.
Edited by t1grm on Tuesday 10th January 16:47
t1grm said:
Yeah maybe I need to look at that. The thing is that was supposed to be the low risk "banker" where I put the 50% to be left alone. Then I can chop and change the other 50% into stuff more high risk. Great strategy that turned out to be. And the IFA never even looked at it. He just focused on swapping the higher risk 50% into new funds each time we met.
IFAs can't predict investment returns. If they could, they wouldn't need to work as IFAs.All they can do is suggest a fund that meets your risk appetite.
You need to figure out your fees in percentage terms. What % management charge are you paying annually? What other fees are you paying annually? What you've said so far doesn't really answer that question.
I fear that chopping and changing your funds when you think performance is bad won't do much to help you in the long run.
mcbook said:
You need to figure out your fees in percentage terms. What % management charge are you paying annually? What other fees are you paying annually? What you've said so far doesn't really answer that question.
How do I find that out? The only info I have on fee's are the sell transactions that are made each month and listed as maintenance fee. That's about 1% of contributions. The other fees are incorporated into the fund price and are opaque to me.t1grm said:
How do I find that out? The only info I have on fee's are the sell transactions that are made each month and listed as maintenance fee. That's about 1% of contributions. The other fees are incorporated into the fund price and are opaque to me.
That's something that your IFA should really be able to help you with. If he can't give you a clear, transparent view of all fees and charges then you should be worried. If all combined fees are 1% annually that's not terrible but it's not good either. You can do a lot better.If your IFA is dragging his feet, look through all the documentation you have and what's online. Fees need to be stated quite clearly these days.
trickywoo said:
t1grm said:
Even the balanced managed fund is -2% over the life of the pension and that's supposed to be the low risk one that I'm putting 50% into.
These are the funds I'm in:
OMI IM EUR BALANCED
Thats your problem. From its peak in June 2015 its down near enough 30%. Its one thing to hang in and not sell but another entirely to continue pouring 50% of your contribution in.These are the funds I'm in:
OMI IM EUR BALANCED
I'd reassess that soonest.
t1grm said:
Just checked my pension plan and 13 years in it's only 8% up on what I've contributed. Should I be worried or is that normal for about half way through it's life? I know spot valuations aren't a true reflection of your final pension and that it grows more towards the end but 8% over 13 years seems pretty rubbish to me.
Most of the increase has come from one fund which is up 43% The others are all single digit or negative. Even the balanced managed fund is -2% over the life of the pension and that's supposed to be the low risk one that I'm putting 50% into.
My financial adviser is next to useless. He only meets me when I chase him for about 6 weeks and then just seems to pick a couple of funds at random and tells me to switch to get me off his back. Last time I even had to do the switch myself as I gave up chasing him for the paperwork.
If I go to a new IFA he'll just try to sell me a new pension. Last time I did that I ended up with this one plus the old one just got eaten up by charges as I closed it early.
I'm starting to get worried now as I already got shafted on an Abbey Life pension which is worthless but fortunately was only in it for 2 years. This one I've had for 13 years and I'm running out of time to sort things out.
My advice would be to take a well planned and presented case to the Ombudsman and rinse your IFA out. The more people who nail their negligent IFAs to the wall the better for everyone. Most of the increase has come from one fund which is up 43% The others are all single digit or negative. Even the balanced managed fund is -2% over the life of the pension and that's supposed to be the low risk one that I'm putting 50% into.
My financial adviser is next to useless. He only meets me when I chase him for about 6 weeks and then just seems to pick a couple of funds at random and tells me to switch to get me off his back. Last time I even had to do the switch myself as I gave up chasing him for the paperwork.
If I go to a new IFA he'll just try to sell me a new pension. Last time I did that I ended up with this one plus the old one just got eaten up by charges as I closed it early.
I'm starting to get worried now as I already got shafted on an Abbey Life pension which is worthless but fortunately was only in it for 2 years. This one I've had for 13 years and I'm running out of time to sort things out.
You need someone to help look at what your total contributions have been, how much of that has been taken in fees and also masked commissions, you also need to find the records of the actual advice you were given and accepted and see how that marries with the funds that you were invested into etc.
But the long and short of it is that that performance is utter crap and unacceptable based on the limited info you've given.
t1rgm,
Why are you in offshore funds, and are the funds that you're in, still consistent with the risk profile of what you should have? If your adviser has done his/her job correctly, they're not automatically responsible for poor performance.
Just to clarify, there's a difference between a fund switch and a rebalance. The rebalance takes place to ensure that your asset allocation remains the same in light of varying market conditions, and to allow you to achieve correct asset allocation and/or diversification. How often do you get assessed for risk/capacity and at least as importantly, inclination for loss? A good adviser should know his client and be able to filter out the fear of losing out/fear of missing out.
But a fund switch, on the other hand, could be because you want to achieve a different, new objective, because your risk profile has changed, because the performance of your existing funds have changed, or you may have new circumstances etc etc. Is that 'you'? A fund switch isn't something that's done off the cuff; in many instances, it may be as involved a process as your initial investment.
Why are you in offshore funds, and are the funds that you're in, still consistent with the risk profile of what you should have? If your adviser has done his/her job correctly, they're not automatically responsible for poor performance.
Just to clarify, there's a difference between a fund switch and a rebalance. The rebalance takes place to ensure that your asset allocation remains the same in light of varying market conditions, and to allow you to achieve correct asset allocation and/or diversification. How often do you get assessed for risk/capacity and at least as importantly, inclination for loss? A good adviser should know his client and be able to filter out the fear of losing out/fear of missing out.
But a fund switch, on the other hand, could be because you want to achieve a different, new objective, because your risk profile has changed, because the performance of your existing funds have changed, or you may have new circumstances etc etc. Is that 'you'? A fund switch isn't something that's done off the cuff; in many instances, it may be as involved a process as your initial investment.
Ginge R said:
t1rgm,
Why are you in offshore funds, and are the funds that you're in, still consistent with the risk profile of what you should have? If your adviser has done his/her job correctly, they're not automatically responsible for poor performance.
I was thinking that too - absolutely no exposure to the UK stock market seems a bit odd for a UK pension surely? Why are you in offshore funds, and are the funds that you're in, still consistent with the risk profile of what you should have? If your adviser has done his/her job correctly, they're not automatically responsible for poor performance.
trickywoo said:
t1grm said:
Even the balanced managed fund is -2% over the life of the pension and that's supposed to be the low risk one that I'm putting 50% into.
These are the funds I'm in:
OMI IM EUR BALANCED
Thats your problem. From its peak in June 2015 its down near enough 30%. Its one thing to hang in and not sell but another entirely to continue pouring 50% of your contribution in.These are the funds I'm in:
OMI IM EUR BALANCED
I'd reassess that soonest.
Fees seem to be 1.5%
I think your IFA is pulling a fast one as you appear to be paying relatively high management fees (because the strategies you are invested in are more complicated) but the funds you are invested in don't seem to be closely aligned with your risk profile.
If you are being charged extra £10 transaction costs then something suspicious is talking place.
If you are being charged extra £10 transaction costs then something suspicious is talking place.
davepoth said:
Ginge R said:
t1rgm,
Why are you in offshore funds, and are the funds that you're in, still consistent with the risk profile of what you should have? If your adviser has done his/her job correctly, they're not automatically responsible for poor performance.
I was thinking that too - absolutely no exposure to the UK stock market seems a bit odd for a UK pension surely? Why are you in offshore funds, and are the funds that you're in, still consistent with the risk profile of what you should have? If your adviser has done his/her job correctly, they're not automatically responsible for poor performance.
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