Is my M&S stakeholder pension OK?

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
39 replies 8.2K views


  • mrsturnmrsturn Forumite
    8 Posts
    Well - thank you both for the advice. I plan to re-read it, and then read it again!!

    It is more important to me to get the best returns rather than save a small amount on charges. I'll investigate some of the funds DD has mentioned and see...maybe a trip to an IFA is what is needed!

    Thanks again.
    if i had known then what i know now
  • PalPal Forumite
    2.1K Posts
    So I've been ignored then!   :'(

    How are you going to investigate them funds he recommends?  Look at past performance statistics? Read their sales blurb?

    The only way to compare fund managers is to get right inside them and test whether their systems, people and processes are in place to properly implement their chosen investment methodology.  At that point you can go with the manager whose methodology matches your own objectives and risk profile.

    I do not know of a single IFA who does this, and many investment consulting companies do not do it properly either.  As a result the chance of any retail investor adequately reviewing investment managers is zero.

    So if you are going to pick one of the providers DD suggested, the best way would be to throw darts at a list of their names and go with the one you hit.  You have just as much chance of achieving the best returns, and at least you are not being swayed by well written marketing material, or irrelevant, inaccurate and misleading past performance statistics.
  • dunstonhdunstonh Forumite
    107.3K Posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    I dont think its a case of you being ignored.  

    As I said, everyone has a personal view on this and it really isnt a right or wrong.   As long as you are aware that there is no guarantees on what fund is going to be best.

    I'm invested in some of the most expensive funds in the industry and i'm sitting in here averaging over 10% pa. over the last 5 years after charges.  That makes me very smug  :P but i knew at the start that there was no guarantees and they could all underperform over the next 5 years.  However, I am willing to accept that.  Another thing I have is that my pension portfolio is spread over 10 funds and they get rebalanced every year which proved to be very beneficial when the market took a dive 3 years ago.

    I should point out that i wasnt recommending those funds.  I was just showing that all the major insurance companies had performed better with their same funds than the clothes shop  ;D  Perhaps when Norwich Union start selling underwear, M&S can get their own back.  To be honest, i probably wouldnt recommend those funds either.  I dont really like managed portfolio funds, i prefer to build a portfolio with funds investing in the individual areas.   This spreads the investment over different managers who specialise in that area rather than having a "generic" fund manager or even no specific manager as some of those funds are very passive in their activity.   A bit like saying would you go to a GP for a heart transplant or a heart specialist.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • mrsturnmrsturn Forumite
    8 Posts
    Sorry - not meaning to ignore any advice! But how do I a mere 'Newbie' get inside the systems of fund managers etc??? It all sounds so complicated. I chose the chothes shop on the basis of their low charges. Now that was easy.........and see what I have done :-[

    I feel that even if I can change to another fund which performed at even average I am better off!
    if i had known then what i know now
  • PalPal Forumite
    2.1K Posts
    But how do I a mere 'Newbie' get inside the systems of fund managers etc???

    You can't, which is why you might as well just guess.
    It all sounds so complicated.

    Yep, which is why hardly anyone does it properly. They all fool themselves into thinking they are investing wisely when they are using fundamentally flawed methods and inaccurate data to make their decisions.

    If you want to see some really foolish investors making some really daft decisions, take a look at the SIPP and investors round table chat forums on
    I feel that even if I can change to another fund which performed at even average I am better off!


    If the fund has performed "average" you are not better off because you were not invested in it when it performed "average" - you were invested in something else. The fund you switch to MIGHT get better performance in future, but you might also get worse performance. The M&S fund might outperform all of DD's suggestions in the future over your chosen time frame. No-one knows.

    Put past performance out of your mind. You need to read the marketing blurb for a number of companies (ignoring the sales spin as best you can) to find a selection that invest in a manner that makes sense to you. i.e. HOW are they going to invest so that their fund outperforms their benchmark index.

    When you have a list, throw a dart at it or use another random method of selecting.


    Then go away and come back in five years. Don't look at it in the meantime because performance over a shorter period is almost entirely the result of random noise. (In fact 5 years is too short but you have to look some time).

    Alternatively, invest in a major tracker fund like L&G, then you really can go away and not worry about underperforming the index.

    A final solution - go to an IFA and get him to pick the funds. He is no more likely that you to select the right ones, but at least it gives you someone other than yourself to blame if it underperforms. ;)
  • mrsturnmrsturn Forumite
    8 Posts
    Thank you Pal. What can I say?.....I'll take my chances and cross my fingers then ;)
    if i had known then what i know now
  • paul666paul666 Forumite
    95 Posts
    Pal - Nice to read you again - where have you been :-)
    If you want to see some really foolish investors making some really daft decisions, take a look at the SIPP and investors round table chat forums on
    !! That's a little harsh
    go to an IFA and get him to pick the funds. He is no more likely that you to select the right ones
    Now that's going just a little too far :-/
  • DiggingOutDiggingOut Forumite
    770 Posts
    I disagree with Pal, partly (FWIW). I think past performance can tell us a lot about a fund manager.

    If his past performance is poor in good markets and poor in bad markets, it is evidence (not conclusive, of course) that he may not have a clue what he is doing. He may do really well in the future through luck.

    An aggressive manager will often outperform the index in a good market, and get pummeled in a bad one. A cautious manager will be the exact opposite.

    A lucky manager may guess when to be aggressive and when to be cautious, and do well in both types of markets.

    A good manager will likely do poorly in some markets in the short term, because he is investing rather than gambling, but in the long term he will have picked the right investments for a solid performance.

    But the guy who has done poorly in both good and bad markets will never get my money to play with. To me, he seems to be relying on luck, and while he might get it right next time, it is a gamble. The guy who has done well in both types of markets is probably also relying on luck, but not always. He may have made solid investments that paid off even in the bad market.
    I have five stars! This doesn't mean that I know anything about any of the things I post. I could be a raving lunatic, or a brilliant genius, or just some guy on the internet. In fact, I could be all three at the same time.

    If anything I say makes sense, then do it. If not, don't. Don't blame me or my stars if you do something stupid because I suggested it. I'm responsible for my own stupidity only. You are responsible for yours.

    Why, I don't even have five stars anymore! Aren't you glad you aren't responsible for my stupidity?
  • mrsturnmrsturn Forumite
    8 Posts anyone willing to give me a couple of good managers (although past performance is no guarantee of future performance!! - see I am learning ;D) and where they can be found? I could then read their information and decide which funds involve the type of risk etc. which I am happy with. Does that seem sensible?
    if i had known then what i know now
  • PalPal Forumite
    2.1K Posts
    You and Paul666 are completely wrong.

    I started writing out an epic response to explain why, but I really can't be bothered at the moment (got videogames to play) so I will summarise it as follows:

    - Share price movements are almost entirely randomly generated by factors other than company performance;

    - Stock market movements are based on share price movements. They reflect the average of a series of random number changes. It takes over 10 years to begin to see the underlying company fundamentals impacting on share indicies, far too long for most investors making fund comparisons. Ideally you want over 25 years of data.

    - Fund management companies are established to make money, however instead of making it through investing in the stock markets, they do it by risking other people's money and taking a fixed percentage. Does that make sense to you? Surely a good investment company would invest its own money and not bother allowing other people to invest at all?

    - Fund managers generally have flawed research methods, employ poor quality people (often because they went to the right school) and have poorly constructed investment methodology that they fail to implement properly.

    - Fund manager's thinking is very short term, focusing on the next quarterly statistics rather than any long term picture, and they bias their investment decisions accordingly.

    As a result comparing any fund to a benchmark index is just comparing a series of random numbers against another one. What information does that really give you? Comparing fund managers to other fund managers just building another random factor (the investment manager itself) into the comparison and gives even less useful information.

    In addition, most funds, if they have a long term past record at all, have experience many and frequent changes of staff. As a result past performance tells you nothing about the quality of the staff or their history.

    This is the short response remember! ;)

    I suppose if you want to gamble on stocks then by all means use past performance as a filtering method to help you whittle down the choices. Your choices will have just as much chance of outperforming going forward as funds you choose using any other method. But don't fool yourself that what you are doing makes any sense.

    Personally I would rather draw names out of a hat. Makes just as much sense to me and is much quicker. I don't have to crawl through lots of sales blurb and internet sites just to kid myself that I know what I am doing.

    (That said I would just use index tracker funds)

    Paul666 said:
    !! That's a little harsh

    but fair. ;)
    Now that's going just a little too far.

    I work for a firm that acts as IFA to a lot of major companies. I have access to an enormous fund research department full of highly intelligent, highly qualified people. I also have access to all sorts of statistics and information from which all the marketing spin has been removed.

    Even so, I would not pretend for one moment that I could choose a fund that would outperform going forward based on anything more than blind luck.

    I assume that you are an IFA advising individuals? Out of interest, what information do you use to choose funds for clients and where do you get the information from? (This is a genuine question).
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