SERPS pension losses

thehorologist

Thank you for your continued responses. Am I right in thinking you are a Financial Advisor (albeit not acting as such through this forum?) I ask because it appears most of the respondents in this thread are, and a few only jump in to defend when something raises their hackles ignoring, the initial input information I gave at the start of this thread. (I was a Forum Newbie)
I detect a lack of empathy with the little guy with income so low as to be of any interest to an IFA and who decided to go it alone based on the TRUST of the information supplied by the government and its approved private investment companies. (Did I hear gales of laughter when I mentioned Trust?)
The point here is I studied the government scheme. I studied several private pension companies with their available information. I found little to choose between them and chose a major player. There was ample evidence to suggest the potential of greater pensions but no warnings that I could actually get less than my SEPRS pension. This came as a complete blow to me only months before taking my pension at 65.
So those IFA who accuse me of lack of research, failure to take responsibility for investments etc, please tell me where the information was published in 1987/88 that should have forewarned me. (Take as example the info from HSBC (Midland) and Sun Life (two of which I studied) and add any warning in the government publicity. So where was the warning?
Also bear in mind when accusing me of lack of research and responsibility that no Martins Forum existed then and for my own part did exercise responsibility by opting back in 1993 at the first indication that things were not going as well as expected.
So I opted out from 1987 to 1993 (incidentally the period when in a lifetimes earnings my income was at its highest) Opting out has caused me to get less pension than if I had stayed in.
So please don’t accuse me of lack of research and lack of responsibility or being a lazy investor. The only people who won in my situation were those who took no action, ignored the government scheme and pension providers and stayed in SERPS.
Taken the information available at the time I suggest no FSA would have advised me to do anything other than the action I took.

I joined this forum in the hope of exchanging experiences from people in a similar situation in the hope of finding a resolution. I did not expect to be shot down in flames and ridiculed for my naivety by IFA’s who could not have helped me in the first place.
I have obviously been bashing my head against a brick wall.
(I exclude some useful tips for which I thank those individuals)

Regards Chris Bowden

2sides2everystory

It's a funny old forum sometimes Chris.

I was never a financial adviser but close enough to financial advisers to see how they operated.

Dunstonh has been a stalwart in this sub-forum and others for many years and helped many many MSE'ers with expert knowledge and advice, but I too get annoyed by the almost automatic and unapologetic "if you haven't used a decent IFA by now, then you only have yourself to blame" - you have stated eloquently why that is unfair yet the best of the industry still feels the need to draw the line at the counter ... "you that side and officials only this side - or in my private office if I judge that you've seen the light." I truly liked the fact that earlier in the thread a small number of individuals set out some options to optimise the normal workings in your favour from now on - the options have been laid out by those who seemed to be insiders (maybe some are just clever regular investors).

But the price sometimes paid for a bit of clever but market neutral advice seems to be that you must leave your criticisms of the market and dare I say thoughts of some missale outside the door or you will be reminded that's where they must be parked next time.

dunstonh

but I too get annoyed by the almost automatic and unapologetic "if you haven't used a decent IFA by now, then you only have yourself to blame"

You seem to miss the point that the OP never used an adviser and made the decision to contract out himself and chose the provider himself and chose the investments himself and then went on to do little much else. Again a decision he made. Yet he is now asking for compensation for his own decisions.

so, if you agree with his position, who should pay him the compensation for his own choices?

thehorologist

dunstonh wrote: »

I believe there is only one adviser posting on this thread.



You went it alone and you are just very slightly worse off because of it. That was a choice you made and it didn't pay off for you. You did your own research and made your own decisions. So, its hard to find empathy.
Especialy from IFA?



Information was harder to obtain for the general public back then but IFAs had it. You chose to DIY instead. However, that was 1987/88. What about all the years since then when information and options improved?
So at last an admission that information was harder to find then (except of course at a price!)

if you are refering to the years I was in 87/88 to 93 then as you yourself admit "information was harder to find"

If you refer to the later years my anual statement provided no comparison nor did the governement

The warnings were issued by advisers when you sought advice. If you didnt seek advice then you dont get the advice warnings. You just get the generic investment warnings (you could get back more or less for example - a key one in this case). (You have evidence of this?) (Did the goverment or pension providers advise consulting an IFA at that time?)

As you say my losses are small, but they are also exponetial. Would the cost of an IFA ever have eliminated my losses or cost more than it?


Its not an accusation, its a fact. A lazy investor is one that does not review, rebalance and switch their investments but just leaves it to its own devices.

No the realy lazy did nothing and gained with a better SERPS pension



That is wrong. The real winners were those that were pro-active with their investments (either themselves or using an adviser) and updated their contracts as the rules changed over the years and better options came out.

I could not have been pro active without information which should have been provided as part of the government or Insurance companies obligation to advise me (they were after all charging fees) (The governemt also benfitted by not having to provide me with a SERPS pension for that period.)


Correct. Contracting out in 1988 was a non brainer for the majority of people. It became less so in 1997 onwards (although it did regain some morebenefits a few years back).

So I did take the right course at the time (and did so without an IFA) clever me!

However, that was 23 years ago. How often did you adjust the investments and contract after that? A servicing adviser would have done it many times.

If you refer to the period after I opted back then the same anser as above applies



You haven't been ridiculed. Your "errors" and assumptions were corrected. You started the thread claiming mis-sale and after compensation. Yet you went down the DIY route. So, if you should sue yourself as you are responsible. No-one else.

Admitted there has been some useful realignment of my stance

As a proffesional, if I sell a product to a customer and fail to mention that it does not conform to his expectation, I have a duty under the law to make him aware of this. If I say nothing I am still guilty by neglect. Perhaps this law does not apply to the finacial sector?
(I am refering to the goverment and Pension provider)

Like I said I'm bashing my head on a brick wall here.

dunstonh

So at last an admission that information was harder to find then (except of course at a price!)

Of course it was harder. Its pre-internet. So, you had paper information available. The information was still there. You just had to work harder at it as you could filter things as easily as you can with a computer.

The warnings were issued by advisers when you sought advice. If you didnt seek advice then you dont get the advice warnings. You just get the generic investment warnings (you could get back more or less for example - a key one in this case). (You have evidence of this?) (Did the goverment or pension providers advise consulting an IFA at that time?)

Yes there is evidence of this. Even back then, there were a number of standard risk warnings on the documentation. Standard across all providers.

As a proffesional, if I sell a product to a customer and fail to mention that it does not conform to his expectation, I have a duty under the law to make him aware of this. If I say nothing I am still guilty by neglect. Perhaps this law does not apply to the finacial sector?

If someone doesnt use your services and chooses to do it themselves are you still under the duty to tell them even though they are not employing you?

If they were not paying you for your professional services (and have never paid you anything) would you still be giving them the benefit of your advice 23 years later?

thehorologist

dunstonh wrote: »

Of course it was harder. Its pre-internet. So, you had paper information available. The information was still there. You just had to work harder at it as you could filter things as easily as you can with a computer.

I should not have had to jump through hoops with a governemnt scheme, how much research and at what cost would have been necessary to expose flaws in the government scheme. Perhap a crystal Ball as used by IFA? The matter is different with global internet information available today. Back then (1987) the government were creating a scheme to potentialy enhance my pension (THAT WAS THEIR SALES PITCH) and at no cost to themself. Clearly the government made a canny move here because they will now pay me less than they would have had to, had I stayed in SERPS. The Pension providers were getting my contributions with that in mind and took a fee for providing that service. (In fairness they did warn me once only in 1993 to opt back but nothing since dispite holding my funds)
So you are saying that in the above senario, where both parties have benefitted financially from my taking up the scheme, neither the government or the provder had any further obligation to alert me to potential losses?



Yes there is evidence of this. Even back then, there were a number of standard risk warnings on the documentation. Standard across all providers.

I will investigate to find evidence of this, I can beleive I missed it!



If someone doesnt use your services and chooses to do it themselves are you still under the duty to tell them even though they are not employing you?

Dont be silly of couse not, and thats not what I am saying. Take your IFA hat off for one minit and reveiw my question, I am not refering to IFA but the people who encouraged me out of SERPS (government) and the people who gladly received and still hold my diverted funds.

If they were not paying you for your professional services (and have never paid you anything) would you still be giving them the benefit of your advice 23 years later?

But I was paying through the fees deducted bythe provider wasn't I? A pension is a lifetime product and not one that expires when the client has finished paying for it.
You never mentione my refernce to TRUST or was that just another fantasy dream of my imageination?

EclipsedMind

I read through the whole thread and tbh I think all questions have been answered and I am curous why its going on so long. The OP opted out and invested the money and it did not outperform the Govt. Unlucky but it happens - I have lost money on bad choices too.

Arguing for the sake of it with the board regulars will not magically fix the fact the fund you picked and ignored (until recently) underperformed. Charges on the fund are for the running of the fund and not for providing advice on whether you should be in the fund.

You were a tad unlucky but it could have been worse or it might have been better had you reviewed it/had advice along the way. Hindsight is wonderful but you made your choice and you got your outcome and now you get to live with it.

If you still believe you were mislead come back when you have your smoking gun but nothing you have posted indicates it even exists. You said yourself "the government were creating a scheme to potentialy enhance my pension (THAT WAS THEIR SALES PITCH)" which is a statement that indicates you might get a better pension but is not a certainty. When coupled with the standard up or down warnings you would not find a jury in the land that would say the average person would believe it was a certainty and without risk. Thus as has been said by pretty much everyone you were not misled and have only yourself to look to for your loses. Sorry its not the asnwer you wanted but you should find it to be the truth.

No one ever said life is fair and if you don't understand financial matters get advice from someone who does or it is like juggling chainsaws - i.e. you can have painful loses.


EM

Disclaimer: I am not IFA nor have I ever been one or will ever be one. I merely invest in and research financial products for my own benefit and I speak only for myself.

dunstonh

I should not have had to jump through hoops with a governemnt scheme,

You chose to opt out of the Govt scheme to take personal responsibility instead.

The Pension providers were getting my contributions with that in mind and took a fee for providing that service. (In fairness they did warn me once only in 1993 to opt back but nothing since dispite holding my funds)

The pension provider gave the service you paid for.

Dont be silly of couse not, and thats not what I am saying. Take your IFA hat off for one minit and reveiw my question, I am not refering to IFA but the people who encouraged me out of SERPS (government) and the people who gladly received and still hold my diverted funds.

That is the point though. The Govt made the option available. You could choose to use it or not. The pension provider just took your instructions to invest where you told them to invest. They are not there to give you advice.

But I was paying through the fees deducted bythe provider wasn't I?

No. You were paying fees for the administration of the pension wrapper and the investments you chose. Not for advice provision.

A pension is a lifetime product and not one that expires when the client has finished paying for it.

A pension is no more a lifetime product than a TV or a car. It could potentially go a lifetime but it will begin to look dated when more modern options come along.

You never mentione my refernce to TRUST or was that just another fantasy dream of my imageination?

You got what you asked for. Nothing more, nothing less.

thehorologist

:silenced::silenced: O.K. consider the subject closed. Thank you

thehorologist

with apologies for reopening this thread, I was not detered by negative reponces and felt sure there was a case to be answered.
Further enquiries have led to an interestig revelation.
Although I was opted out of SERPS from April 1987 the Pension provider did not receive transfer of my first contibution until February 1989. I delay of 22 months when I was neither in SERPS not a private pension would help to explain why my potential anuity is less than my notional SERPS.