Is my pension advisors advice in my best interest?

lvader

Most stock markets peaked or where close to peak 10 yeays ago so the returns there look about right. It's the 3 month return that is hard to understand, all the markets are well up from 3 months ago.

EDIT: It's old data, June 2010. That's why it didn't look correct.

vectistim

peetj wrote: »

Is one fund seriously only giving 1% compound interest over a 10 year period, where the other is giving -0.5%???

For comparison http://www.moneyweek.com/news-and-charts/market-data/ftse.aspx there is a graph showing the FTSE 100 and if you change the period to All you can see that it is currently down on where it was at the end of 2000.

As you can see its been a fairly choppy ride, but that does mean that when the stock markets have been down, you regular payments have bought more stock during those months.

The rebalancing ought to ensuring you have sufficient diversification into different markets (by both location and asset type). There should also be changes to the risk profile over the course of a pension investment - in the early years generally more risk and volatility is acceptable, then in the later years there can be a gradual move into cash based assets as you need to start crystalising the value in the pension.

dunstonh

Does the above show good advice?

The funds are for the "lazy investor" - as in not actively investing and no real interest in it. The funds would typically be used by an adviser where you do not have a servicing agreement. So, on that basis, there is nothing wrong. If you had a servicing agreement then they are not the sort of funds that would typically be used.

Is one fund seriously only giving 1% compound interest over a 10 year period, where the other is giving -0.5%???

No. Thats not have investments work. 1) there is no interest and 2) returns zig zag and we have just had a major economic event where values are still down on their peak (reference to Western economy equities - not other areas) 3) when paying monthly you get to average out those ups and downs and a down period can be a very good thing.

peetj

Ok, fair enough the market has varied a lot in 10 years - but these investments are doing worse than the sector median in almost all time scales.

to quote edinburgher:
"Well, how is the pension performing in your eyes? If it's doing well, what's the problem? I'm happy to pay a reasonable price for decent financial advice (or for an advisor to make money from decisions that benefit me in the long term)"

Do you consider that I have received good advice ? or at least reasonable advice?
I was wary about the state of flux, and the payouts my pensions advisor seemed to be receiving, to top this the advice given doesn't seem to be particularly great either. If they were doing better than average I'd be ok with it.... but they aren't.

jamesd

It was reasonable, typical enough for recommendations to people who are inexperienced with investments and don't want to pay a lot of attention. Half of the money gets below average results, else it wouldn't be the average.

If you're interested in doing more work on investment selection you may be able to do better. Depends how well you do at picking investments.

dunstonh

Ok, fair enough the market has varied a lot in 10 years - but these investments are doing worse than the sector median in almost all time scales.

Only slightly and that is to be expected as it is effectively sector average fund. That is what it will be and what its designed to be and it is doing exactly what it should be doing.

I was wary about the state of flux, and the payouts my pensions advisor seemed to be receiving, to top this the advice given doesn't seem to be particularly great either.

If you were employing the adviser to give you portfolio advice I would agree. However, if you are not paying for portfolio advice then the recommendation is sound.

I'm confused. You say the adviser makes fund changes each year. Yet you suggest now that the fund you are in has been held long term. You also say the IFA is earning from you from fund switches but the Aegon PP doesnt charge on fund switches. So, are you paying him explicitly (i.e. writing a cheque)?

What is your service agreement with the IFA and what do you employ the IFA to do and what do you pay him to do it?