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MSE News: £60m compensation for Scottish Equitable pension savers

2

Comments

  • I am an employee benefits adviser and a former employee of Scottish Equitable. Trust me I would not touch this company with the preverbial bargepole.

    The financial services industry through the RDR are on a crusade to provide a level of professionalism that is at the same level as chartered accountants/lawyers etc. At the same time companies like AEGON Scottish Equitable who are nothing more than product peddlers cannot offer any sort of service if their lives depended on it.

    I have lost count of the number of times AEGON SE has failed to get the basics right.
  • dunstonh
    dunstonh Posts: 118,003 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    This last year they have achieved a net growth of about 0.5% in the cash fund having charged 0.6% for doing so. Blithering idiots is too good a description for cash fund "managers" who achieve results like that.

    Whats wrong with that?
    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.
  • peterbaker
    peterbaker Posts: 3,083 Forumite
    edited 16 December 2010 at 10:34PM
    Outside of any pension wrapper or any other so-called tax efficient vehicle, I achieved results on a simple savings account over the same period on a similar sum of virtually 10x that on a gross basis dunstonh, that's what's wrong with 0.5%.

    0.5% is completely derisory. 1.1% is derisory. Taking 0.6% as a "charge" from the 1.1%, leaving just 0.5% is scandalous especially when the company has had the benefit of using that money not me.

    No offence old chap but methinks you may get far too used to comparing the best of a bad bunch on a daily basis instead of rising above it and taking a more pragmatic view sometimes :p
  • dunstonh
    dunstonh Posts: 118,003 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Outside of any pension wrapper or any other so-called tax efficient vehicle, I achieved results on a simple savings account over the same period on a similar sum of virtually 10x that on a gross basis dunstonh, that's what's wrong with 0.5%.

    Good for you. However, cash funds are not savings accounts. They also dont get FSCS protection. Institutional cash lost money with some of these failures. Retail savings didnt.
    0.5% is completely derisory.

    Whats the base rate?
    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.
  • peterbaker
    peterbaker Posts: 3,083 Forumite
    What's the base rate????

    Did you perhaps mean what's the base rate got to do with it?

    I am not looking for excuses for poor performance from fund managers. I am looking for performance. If they can't perform they are not fit for purpose.
  • peterbaker wrote: »
    I am not looking for excuses for poor performance from fund managers. I am looking for performance. If they can't perform they are not fit for purpose.

    I am no lover of fund managers. But I must spring to their defence on this one.

    I wonder if you fully understand that a fund has a "scope". If that scope is to invest in Latvian smaller companies, then imagine the scenario when Latvia is in complete turmoil and spiralling downwards. It seems that you expect the fund manager to liquidate before that happens, and shove it into Brazilian Copper Mines. He simply cannot do that. The best he can do is achive only 18% loss when the market as a whole has plummeted 34%.

    If you want this sort of 'management' then there are several 'absolute' funds that are very complex, using derivatives, and aim to make money even in a falling market. But I guess you would then complain that he hadn't made the full 10% when 'ordinary' funds had achieved 10%.

    I'm sorry, but when a market/sector goes down 12%, then the best fund manager in the world cannot avoid making a loss! His job is to invest in the Latvian market, and that's exactly what he will do. Don't like it? Then don't invest in that fund.
  • peterbaker
    peterbaker Posts: 3,083 Forumite
    Hello LM

    Tell me, did we really need to know about Latvian anything or Brazilian Copper? I was deliberately in cash on this one for the last 5 years. Aegon SE, Scottish Equitable, or whatever they call themselves could not even keep up with me and my simple savings accounts, let alone Cash ISA's, for example.

    The whole UK pensions market is totally unfit for purpose and this Scottish Equitable revelation (and to ordinary investors that is what it is) is surely the tip of a very large iceberg which will just melt away with our cash unless the government intervenes to nationalise and ringfence the whole sorry business before the City has it all away in another few years of middlemen fees and commissions and further rounds of obscene bonuses for spivs.
  • dunstonh
    dunstonh Posts: 118,003 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Aegon SE, Scottish Equitable, or whatever they call themselves could not even keep up with me and my simple savings accounts, let alone Cash ISA's, for example.

    As already said, the fund you are in is not a savings account. Your expectations were wrong.
    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.
  • peterbaker
    peterbaker Posts: 3,083 Forumite
    edited 17 December 2010 at 12:29PM
    Dunstonh, you do sometimes exasperate me, Sir ;)

    Why would any normal punter NOT expect their locked-in pension funds to do better than instant access savings accounts when they had elected as a result of volatile past performance in other fund options for their funds to be supposedly "rescued", moved out of rollercoaster equities, and held in meaningful totally cautious "cash" funds?

    Please don't give us the same lame excuses as you gave a few posts back about "institutional funds" losing some of our cash through having no FSCS protection when they might have been risking our cash with dodgy outfits.

    You make it sound like it was okay for a pension "cash fund" manager to behave like a naive local authority finance committee tempted to have a flutter on derivatives or in Iceland on devices or people they don't understand or don't know. It was never okay to be that reckless. Cash is for cautious, so in what type of particular circumstances for example would a cautious cash fund have lost money as a result of a Landsbanki or Lehman's collapse?

    It simply is not possible unless they have been investing in something that was not actually cash at all, but was more like investing in highly geared banking stocks which when they failed were summarily scooped up for a song by other predator banks who instantly made a killing.
  • yelf
    yelf Posts: 860 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    peterbaker wrote: »
    Yes I was waiting for someone to utter that old and very useless chestnut, yelf. If companies cannot manage investments in the prevailing climate they should say so. But of course they don't say so. The prevailing climate is a smokescreen for all sorts of jolly wheezes. Would be a shame to give back the money and say "Sorry we seem to have lost the plot - perhaps you'd better put it under the mattress, Sir." Instead they shrug their corporate shoulders and say they must obviously levy charges to cover their overheads. Obviously? Why levy them on us if they can't even organise a booze up in a brewery?

    Can i please aks what fund(s) you were in.

    As a side note. The 1998-2008 return from UK equities was just 1.05%.
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