Pensions, what to do?

dunstonh

Please illustrate using some out put from your whizzy IFA software how much a typical active fund paying management fees, paying trail commission to an IFA, within the costs of a pension wrapper needs to outperform a Vanguard FTSE world tracker ETF with a TER of 0.3% pa to give the same investment return?

You have managed to learn some words and randomly put them together in the hope to persuade us you know something. Whereas in reality it is clear you do not.

Neverland

dunstonh wrote: »

You have managed to learn some words and randomly put them together in the hope to persuade us you know something. Whereas in reality it is clear you do not.

My seven figure personal pension fund would indicate otherwise :cool:

Everything you need to knwo about self investment is here:

https://www.vanguard.co.uk/uk/mvc/investments/mutualfunds#fundstab

Lokolo

Neverland wrote: »

So using your maths on fees (which I don't really agree with) and ignoring the up-front costs for the fee based advice; Taking the (likely) low end of the FSA performance scale so a 5% pa return...

...the active fund chosen for you by the IFA has to outperform the index by 10% per annum EVERY YEAR just to give you the SAME return at the end of the day...

...1 in 100 funds will achieve that on average over the 40 years the OP has until he retires...

...like I say low cost wrapper - self invest wins every time

Eh?

Why does it have to outperform the index by 10% every year to get the same return? Please explain.

Neverland

Lokolo wrote: »

Eh?

Why does it have to outperform the index by 10% every year to get the same return? Please explain.

Fees to IFAs like you and fees to over-paid active fund managers who can't outperform indexes consistently

(OP - google these topics and look at some of the stuff on Vanguard's website by John Bogle)

dunstonh

My seven figure personal pension fund would indicate otherwise

You pension fund value is not to do with returns but the amount you paid into it.

However, what the heck has any of what you have been posting about got to do with your earlier posts making unfounded allegations against IFAs? It looks like we have a no troll on the board. I perhaps a new login for an existing troll.

Neverland

dunstonh wrote: »

You pension fund value is not to do with returns but the amount you paid into it.

However, what the heck has any of what you have been posting about got to do with your earlier posts making unfounded allegations against IFAs? It looks like we have a no troll on the board. I perhaps a new login for an existing troll.

As opposed to an IFA trolling his own services?

You just don't like juicy new fee prospects (sorry, clients) being told they need to give huge chunks of their savings to pay your salaries

mvteng

Without meaning to highjack the original thread, & interupt the lively debate.

My stakeholder pension is split 50% between Friends Life Managed & Friends Life Stewardship managed. Annual management charge is 1%.

Current age is 42, retirement age 70.
Yearly payments into plan = £2400
Total paid into plan since start = £21600.

As above, I appreciate that things may change since the pension was first set up, but does the FL pension still seem like good value?

Neverland

mvteng wrote: »

Without meaning to highjack the original thread, & interupt the lively debate.

My stakeholder pension is split 50% between Friends Life Managed & Friends Life Stewardship managed. Annual management charge is 1%.

Current age is 42, retirement age 70.
Yearly payments into plan = £2400
Total paid into plan since start = £21600.

As above, I appreciate that things may change since the pension was first set up, but does the FL pension still seem like good value?

I dunno what your plan is worth now but lets say its £30k

You are paying FP £300 a year in management fees

If you went with a low cost SIPP wrapper and trackers you can cut that down by more than half

I think I pay my SIPP wrapper £30 a year admin fees and you can get a variety of trackers for 0.2-0.3% per year covering most mainstream investment classes UK and overseas (an example: https://www.vanguard.co.uk/uk/mvc/investments/mutualfunds#fundstab or try ishares)

Thanks for illustrating my point nicely :T

mvteng

Interesting. Correct, current transfer value = £27282

However, the monthly £200 is paid direct by my company to FP & was set up by the company appointed IFA.

With this in mind, really I was questioning if the FP funds chosen are still good, or if there are better performing FP funds available

dunstonh

With this in mind, really I was questioning if the FP funds chosen are still good, or if there are better performing FP funds available

FP employer pensions are more basic (usually at the request of the employer). They will have a range of funds to suit most basic investors. The managed fund is a portfolio fund that is really designed to follow benchmark. It will never be best but never worst. Exactly the same principle as the troll is saying you should use although he doesn't appear to realise it.