Should I be worried about my pension?
Discussion
MagicalTrevor said:
Crikey! 8% over 13 years!?
I started using an IFA, moved existing low performing pensions to a new company and it made nigh on 10% last year alone after fees.
Many markets were up 20% or more last year, so whether +10% is any good or not will depend on what you invested in.I started using an IFA, moved existing low performing pensions to a new company and it made nigh on 10% last year alone after fees.
nyt said:
Fail then.Plus £10 per transaction. Why are there any transactions!? Surely its just buy and hold based on asset allocation and rebalancing via new funds.
1.5% is crimimal these days when you can pay 0.07% for a tracker. Thats 2100% more expensive than a passive tracker!
Sorry should have added I'm an ex-pat and this is an offshore pension. Hence the reason it's all in Euros. Pension is in IOM, I'm in Malta, IFA is registered in Luxembourg I think but I generally liase with their Brussels office because that's where I was working when I took the pension out.
I assume the correct authority to complain to would be IOM since that is where the pension is based but would they be able to take any sanction against a Luxembourg based IFA?
I assume the correct authority to complain to would be IOM since that is where the pension is based but would they be able to take any sanction against a Luxembourg based IFA?
No. looks like it is pretty well spread out to avoid such issues.
Lots of expats get mugged by offshore IFAs. Partly because for many becoming expat is the first time they are earning big money so are much easier targets to churn and partly because of the lack of regulation in contrast to being onshore somewhere like the UK. With a lot of offshore structures you can still hide juicy executions spreads in the products as well as charging overt execution fees and then on top a premium for a crappy wrapper that typically has far less protection than their onshore equivalents.
My personal experience of 20 years of working in financial services in and around Europe is that I have never met an honest person on the mainland. Their natural state of dishonesty when it comes to managing money is really quite staggering. I get asked less frequently for payoffs in the Middle East and Africa than I do in Europe. They are staggeringly corrupt and I would never entertain a personal wealth strategy that involved Belgians or Lux.
What hasn't helped is the domestic changes here that mean the majority of clients just aren't profitable to IFAs and IFAs have had to change to massively strip down their service levels. It does very much depend on which side of this divide as to whether you will get a full service or a stripped down level (in the SE this seems to be around £500k with many firms not taking in clients who have less than £1m). Hence the rise of ultra cheap automated services like nutmeg but the jury is still out on those and there isn't the widest of choices in that arena.
Lots of expats get mugged by offshore IFAs. Partly because for many becoming expat is the first time they are earning big money so are much easier targets to churn and partly because of the lack of regulation in contrast to being onshore somewhere like the UK. With a lot of offshore structures you can still hide juicy executions spreads in the products as well as charging overt execution fees and then on top a premium for a crappy wrapper that typically has far less protection than their onshore equivalents.
My personal experience of 20 years of working in financial services in and around Europe is that I have never met an honest person on the mainland. Their natural state of dishonesty when it comes to managing money is really quite staggering. I get asked less frequently for payoffs in the Middle East and Africa than I do in Europe. They are staggeringly corrupt and I would never entertain a personal wealth strategy that involved Belgians or Lux.
What hasn't helped is the domestic changes here that mean the majority of clients just aren't profitable to IFAs and IFAs have had to change to massively strip down their service levels. It does very much depend on which side of this divide as to whether you will get a full service or a stripped down level (in the SE this seems to be around £500k with many firms not taking in clients who have less than £1m). Hence the rise of ultra cheap automated services like nutmeg but the jury is still out on those and there isn't the widest of choices in that arena.
Great. So looks like I've been shafted - again. Problem is no UK firm will touch me because I'm an ex-pat. I had a UK pension but I was told I couldn't contribute to it anymore because I left the UK. So if I can't get a UK pension and everyone dealing with ex-pats is on the make what do I do for a pension (apart from move back to the UK)?
Looks to me like I'm either stuck with shovelling money into a pension that will never give a decent return or just cut my losses, stop contributing, put the contributions into something else I can manage myself and accept I will loose most of my investment to date in charges.
Looks to me like I'm either stuck with shovelling money into a pension that will never give a decent return or just cut my losses, stop contributing, put the contributions into something else I can manage myself and accept I will loose most of my investment to date in charges.
DonkeyApple said:
You're focussing on the wrapper rather than the products in it and the people managing it. The problem is the latter. Even if your wrapper is expensive it won't be the cause of your poor returns. That lies at the feet of the managers and their selections.
Right, but then if funds are performing poorly because of the managers selection shouldn't my IFA be suggesting alternative funds?t1grm said:
DonkeyApple said:
You're focussing on the wrapper rather than the products in it and the people managing it. The problem is the latter. Even if your wrapper is expensive it won't be the cause of your poor returns. That lies at the feet of the managers and their selections.
Right, but then if funds are performing poorly because of the managers selection shouldn't my IFA be suggesting alternative funds?But the point I was making was that what seems to be the problem is the entity that you chose to manage your money and that is what should be the key focus at the moment. The wrapper itself is somewhat secondary.
The massive flag for me is that it reads as if 50% of your portfolio is very highly actively managed and yet you have no regular meetings/discussions and when you do the core 50% holding is glossed over. It just reads like your being children need for comms and that is where all your performance has gone.
DonkeyApple said:
Do you have an IFA? I thought it was some chap in Europe?
I was under the impression the chap in Europe was an IFA. In fact it was a company not a chap: http://www.pic-europe.com/ The chap who sold me the pension has since left the company and I've been dealing with someone else.DonkeyApple said:
But the point I was making was that what seems to be the problem is the entity that you chose to manage your money and that is what should be the key focus at the moment. The wrapper itself is somewhat secondary.
The massive flag for me is that it reads as if 50% of your portfolio is very highly actively managed and yet you have no regular meetings/discussions and when you do the core 50% holding is glossed over. It just reads like your being children need for comms and that is where all your performance has gone.
I wouldn't say anything is being actively managed. I've only met them 3 times.The massive flag for me is that it reads as if 50% of your portfolio is very highly actively managed and yet you have no regular meetings/discussions and when you do the core 50% holding is glossed over. It just reads like your being children need for comms and that is where all your performance has gone.
I took the pension out in 2003 and specified 50% low risk and 50% a bit more risky. So we set it up to be 50% into OMI IM EUR BALANCED (supposedly low risk) and a 25/25 split into OMI IM USD BARING E EUROPE EUR and OMI IM USD INV ASEAN EQ EUR (higher risk).
Since then I've had two meetings with them in 2011 and 2015 both at my instigation. In 2011 we switched out of IM USD BARING E EUROPE EUR and OMI IM USD INV ASEAN EQ EUR and put 50% into OMI IM USD BLACKROCK LATAM EUR.
When that fund bombed (-13% in 4 years) I called another meeting in 2015 and switched OMI IM USD BLACKROCK LATAM EUR into a 25/25 split between OMI IM EUR HSBC EUROLND EQ and OMI IM USD FID GLOBAL DIV EUR. That's only been going 18 months so it's difficult to gauge so far.
I never intended to be swapping funds all the time. I just wanted a regular pension. I'm not really into tracking markets or anything like that. I only called the first meeting because I hadn't spoken to anyone for 8 years and the second meeting because the fund I switched to bombed. Now the IFA (or whatever you want to call them) don't even return my calls or answer my emails. So looks like I'm high and dry.
Edited by t1grm on Wednesday 11th January 11:11
They aren't IFAs so it's important to recognise that they won't necessarily be operating in any way commensurate with our IFA industry.
This means absolutely f
k all: http://www.pic-europe.com/about/regulation-and-com...
As they've stopped servicing you (probably as a result of you sticking your beak in) then you can't exactly continueing doing business with them anyway? If they were regulated in the U.K. Then there would be a very clear path for recourse but I have no idea how or what is available under your structure. That is probably the joy of it from their perspective.
This means absolutely f
k all: http://www.pic-europe.com/about/regulation-and-com...As they've stopped servicing you (probably as a result of you sticking your beak in) then you can't exactly continueing doing business with them anyway? If they were regulated in the U.K. Then there would be a very clear path for recourse but I have no idea how or what is available under your structure. That is probably the joy of it from their perspective.
Yeah sort of what I guessed. I googled the name of the guy who originally sold me the pension, and has since left, and got several hits linking him to some dodgy ex-pat pension deals in Thailand. No surprise there. Obviously a bunch of fly by nighters.
On the subject of fees I found the following:
7% bid/offer spread
1% annual management charge
8.60 EUR monthly maintenance - since gone up to 10.50
I assume that is on top of the AMC quoted for the individual funds? Am I right in thinking the bid/offer spread goes to the intermediary?
I should add they are topping up my contributions by 2% each month (and by 15% for the first two years) so that offsets some of it.
Thanks for your help BTW
On the subject of fees I found the following:
7% bid/offer spread
1% annual management charge
8.60 EUR monthly maintenance - since gone up to 10.50
I assume that is on top of the AMC quoted for the individual funds? Am I right in thinking the bid/offer spread goes to the intermediary?
I should add they are topping up my contributions by 2% each month (and by 15% for the first two years) so that offsets some of it.
Thanks for your help BTW
t1grm said:
Yeah sort of what I guessed. I googled the name of the guy who originally sold me the pension, and has since left, and got several hits linking him to some dodgy ex-pat pension deals in Thailand. No surprise there. Obviously a bunch of fly by nighters.
On the subject of fees I found the following:
7% bid/offer spread
1% annual management charge
8.60 EUR monthly maintenance - since gone up to 10.50
I assume that is on top of the AMC quoted for the individual funds? Am I right in thinking the bid/offer spread goes to the intermediary?
I should add they are topping up my contributions by 2% each month (and by 15% for the first two years) so that offsets some of it.
Thanks for your help BTW
1% annual management chargeOn the subject of fees I found the following:
7% bid/offer spread
1% annual management charge
8.60 EUR monthly maintenance - since gone up to 10.50
I assume that is on top of the AMC quoted for the individual funds? Am I right in thinking the bid/offer spread goes to the intermediary?
I should add they are topping up my contributions by 2% each month (and by 15% for the first two years) so that offsets some of it.
Thanks for your help BTW
8.60 EUR monthly maintenance - since gone up to 10.50
That sounds like they are charging you for the same thing twice effectively?
I don't know anything about the best way to get a pension outside the UK (I actually am a Brit living outside the UK but earn a Norwegian pension so have not got the same situation as you) but it seems like one option is QROPS? If you did that it (from very very quick reading) seems like you wouldn't get the best tax advantage, but you could perhaps get a non-dodgy pension company which will give better returns on your investments (both lower costs and better picks for funds). However I have no idea about this so it might be obviously stupid to some of the posters who know more...
I'd guess you also might have to face the choice between taking a higher risk than you had before to make up the lost time - but that would depend on how much you want to live on, and when you plan to retire. I guess the flip side is that you might want to go for more capital preservation since you have "lost" a lot already.
Not a nice situation to be in.t1grm said:
When that fund bombed (-13% in 4 years) I called another meeting in 2015 and switched OMI IM USD BLACKROCK LATAM EUR into a 25/25 split between OMI IM EUR HSBC EUROLND EQ and OMI IM USD FID GLOBAL DIV EUR. That's only been going 18 months so it's difficult to gauge so far.
I never intended to be swapping funds all the time. I just wanted a regular pension. I'm not really into tracking markets or anything like that. I only called the first meeting because I hadn't spoken to anyone for 8 years and the second meeting because the fund I switched to bombed. Now the IFA (or whatever you want to call them) don't even return my calls or answer my emails. So looks like I'm high and dry.
You appear to have been badly (and expensively) advised, but that's clearly not your fault.I never intended to be swapping funds all the time. I just wanted a regular pension. I'm not really into tracking markets or anything like that. I only called the first meeting because I hadn't spoken to anyone for 8 years and the second meeting because the fund I switched to bombed. Now the IFA (or whatever you want to call them) don't even return my calls or answer my emails. So looks like I'm high and dry.
As far as the funds are concerned, the poor performance that you highlight is not necessarily the manger's fault - you need to compare this against the benchmark for the market in which they were invested.
In volatile / risky funds such as those you are invested in, you would expect more ups and downs, and cashing out after a down is rarely the best strategy.
If the underlying fund managers aren't at fault it might well be that the IFA who is allocating your portfolio is very much at fault, either being in the wrong things at the wrong times or for not better matching your risk appetite to the investment strategy (or both).
One possible strategy would be to try and switch into (cheap) passive equity portfolios, maybe 50% EU 50% World Ex Europe and be prepared to sit on this for a number for years, riding out the ups and downs.
Also, if you aren't getting any service from your IFA then it's not clear you should be paying the €10 monthly fee!
sidicks said:
You appear to have been badly (and expensively) advised, but that's clearly not your fault.
As far as the funds are concerned, the poor performance that you highlight is not necessarily the manger's fault - you need to compare this against the benchmark for the market in which they were invested.
Yeah did that. For the balanced managed fund 5 year gain is 8.17% for the fund vs 49.51% for the category so pretty heavily underperforming.As far as the funds are concerned, the poor performance that you highlight is not necessarily the manger's fault - you need to compare this against the benchmark for the market in which they were invested.
sidicks said:
In volatile / risky funds such as those you are invested in, you would expect more ups and downs, and cashing out after a down is rarely the best strategy.
I haven't cashed anything out. I've just stopped contributing and have switched future contributions to new funds. I still have the units in the underperforming funds in the hope they might go back up eventually.sidicks said:
If the underlying fund managers aren't at fault it might well be that the IFA who is allocating your portfolio is very much at fault, either being in the wrong things at the wrong times or for not better matching your risk appetite to the investment strategy (or both).
One possible strategy would be to try and switch into (cheap) passive equity portfolios, maybe 50% EU 50% World Ex Europe and be prepared to sit on this for a number for years, riding out the ups and downs.
Also, if you aren't getting any service from your IFA then it's not clear you should be paying the €10 monthly fee!
The 10 EUR monthly fee is being deducted by the pension company so I don't think they are interested in what the intermediary is doing. I complained to the pension co about the intermediary ages ago and they didn't want to know, saying it's nothing to do with them. I asked them if I could switch intermediary and they said no problem but it's down to me to find one then let them know who it is. I asked for a list and they said they could only provide a list of UK registered IFA's which is no good because I'm an ex-pat - go figure. I doubt very much I will find a new intermediary that will take on managing an existing pension (unless I pay them directly) as there is simply no financial benefit to them and, quite frankly, after this I don't trust any the offshore intermediaries.One possible strategy would be to try and switch into (cheap) passive equity portfolios, maybe 50% EU 50% World Ex Europe and be prepared to sit on this for a number for years, riding out the ups and downs.
Also, if you aren't getting any service from your IFA then it's not clear you should be paying the €10 monthly fee!
The thing is, I don't think I've got a fundamentally bad pension. As far as I am aware Old Mutual is a well established and respected financial company even if the intermediary that sold me the pension was a shark. Yes the fees are a bit higher than a UK pension but offshore financial products are generally more expensive and, as others have said, the higher fees are not enough to account for the all of the poor performance of the pension. The problem is I seem to be in the wrong funds and the intermediary either doesn't want to know or can't be bothered. So I'm stuck with just trying to work it out myself and winging it or shutting it down, taking a hit on fees and going for something else. The question is whether the next one would be just as bad as the one I would have just jumped out of. The whole area is a minefield quite frankly.
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