In cash since October/November

waccamole

Hi

Back in October I transferred a couple of personal pensions and a stocks & shares ISA to the Aviva platform on the advice of my new IFA.

I was surprised to find when I checked online recently that all of the funds were invested in cash and had been since they were transferred over during October and November.

When I asked my IFA why, he said that in October he thought that the market was high so decided not to go straight back in. In fact the markets have continued to rise. He thinks a correction is due so is waiting before moving back in.

When I queried why I was in cash I didn't even realise that the markets had risen - I thought it was a bad idea anyway not realising how bad!

I could understand if I'd come to him with a cash lump sum to invest that it may be best to drip feed the money in to shares. But, I was already invested so expected to remain invested. I didn't explicitly say that to him, I thought that was what he would automatically do (my mistake). Most of what I've read says that trying to time the markets is a bad idea and that if you're in for the long term then you take the rough with the smooth.

It took me long enough to find an IFA (that's a whole other story) but this episode has made me wonder if I've chosen wisely.

Two questions:

1. Should I be concerned about his approach?
2. Should I tell him to start drip feeding money back into the market despite his opinion that it is currently over valued?

Thanks for your thoughts

W

StevieJ

A brave IFA that uses market timing for his clients portfolio They normally stick to the mantra

Time in the market, not timing the market

Jack_Griffin

Sounds like he forgot you & is making excuses.

Did he notify you of this strategy & seek your agreement, do you have anything in writing from him you can check against?

marathonic

I thought the markets were a little top heavy in recent months too but, with so long left to retirement, decided not to transfer to cash. I reckon if I started doing that, I'd lose more than I'd gain over the next 35 years or more.

To me, it's akin to gambling with your entire pension pot.

BLB53

1. Should I be concerned about his approach?
2. Should I tell him to start drip feeding money back into the market despite his opinion that it is currently over valued?

FWIW, my response would be Yes and Yes.

I do not think you have been best served by your new adviser.

GhIFA

What did his initial report say? Did he give any indication that the funds wouldn't be invested immediately? What was the investment strategy he recommended? On the face of it you have every reason to be concerned.

atush

BLB53 wrote: »

FWIW, my response would be Yes and Yes.

I do not think you have been best served by your new adviser.

I completely agree with this, although I also agree with GIFA in that your initial report should sya something about how the money Was to be invested.

dunstonh

IFAs cannot time the market. Indeed, most will not even attempt to try. It is futile to attempt it. You may get it right sometimes but you will get it wrong just as much and you may as well not bother trying. Sometimes you may, with the agreement of the client (as IFAs cannot trade without client permission) move some funds up or down the risk scale depending on objective, timescale and say if you have come off a good growth period and feel you want to protect some of that. However, that is about as far as it goes.

All transactions have to be agreed by the client. So, what did you agree?

waccamole

Hi again

Been busy so not back on here much.

GhIFA wrote: »

What did his initial report say? Did he give any indication that the funds wouldn't be invested immediately? What was the investment strategy he recommended? On the face of it you have every reason to be concerned.

I didn't get a written report. At the time I thought I should but life's sooo busy and I don't expect to have to check up on a professional, that's why I employ one.

Anyway, I've dealt mostly by email and face to face meetings so am now going to send a letter. Nothing confrontational but just asking why I've not had anything in writing and stating clearly that I didn't expect to be out of the market.

I tell you, I've been trying to find a decent/suitable IFA since Jan 2012 - why is it so hard?

W

waccamole

dunstonh wrote: »

IFAs cannot time the market. Indeed, most will not even attempt to try. It is futile to attempt it. You may get it right sometimes but you will get it wrong just as much and you may as well not bother trying. Sometimes you may, with the agreement of the client (as IFAs cannot trade without client permission) move some funds up or down the risk scale depending on objective, timescale and say if you have come off a good growth period and feel you want to protect some of that. However, that is about as far as it goes.

All transactions have to be agreed by the client. So, what did you agree?

Interesting, as per post above I didn't agree to be out of the market, I agreed to move the pensions and S&S ISA to the Aviva wrap that's all.

marathonic

Perhaps a stupid question but is it a young or newly qualified IFA?

I'd imagine that any IFA that thought they could time the market would have their fingers burned and a lesson learned very, very early in their careers.