How do I judge how well my pension fund is doing relative to other funds?

Gunnfaxi

My wife and I have been saving into a pension provider recommended by our IFA for about four years - but how do we find out how well this fund is doing relative to others? In other words, how can we find out if she gave us the best advice on where to put our money?

dunstonh

My wife and I have been saving into a pension provider recommended by our IFA for about four years - but how do we find out how well this fund is doing relative to others?

There are about 50,000 pension funds. You can look many of them up on sites like Trustnet.

In other words, how can we find out if she gave us the best advice on where to put our money?

I think you are mistaken on what an IFA is there to do. There is no way that four years ago an IFA would know which the best fund is going to be over the next four years. The advice relates to recommending a suitable contract and suitable investments for your knowledge and acceptance of risk/volatility. Almost certainly you will not have the best fund in performance terms but you could have the best fund suitable for you.

quotememiserable

dunstonh wrote: »

I think you are mistaken on what an IFA is there to do. There is no way that four years ago an IFA would know which the best fund is going to be over the next four years. The advice relates to recommending a suitable contract and suitable investments for your knowledge and acceptance of risk/volatility. Almost certainly you will not have the best fund in performance terms but you could have the best fund suitable for you.

Quite right. The selection of funds within the pension wrapper is entirely your choice, although many people fail to realise this so their money sits in the default fund. You need to look at the range offered by your provider and make a choice about how you want the money deployed. You can get more help around here on choosing a diverse blend.

redbuzzard

quotememiserable wrote: »

Quite right. The selection of funds within the pension wrapper is entirely your choice,

It's clear from the OP that any fund choice was guided by the IFA.

It's also self evident that

- the best fund to have been in for the last four years is the one that has gone up the most.

- nobody can tell you what is going to be the best fund for the next four years

In very crude terms, you have the certainty of very modest returns on low risk investments, vs. the best chance of high returns, and at the same time the best (but hopefully lower) chance of big losses on high risk ones.

So it's very unlikely that anybody will get the best possible return since no IFA will recommend either 100% in one fund, or 100% in high risk funds.

It looks to me as if the OP just wants to know if a reasonable expectation would have been met.

What would a decent return look like for monthly contributions over the last 4 years? Average annual total return on the FTSE AS Index has been about 16.67% for the last 4 years, a cigarette packet exercise suggests that monthly payments invested exclusively in that would be worth about 35% more than the amount put in by now. That won't be accurate because the returns haven't been level.

OP, how much more is your fund worth than your total contributions? Unless you have a very recent figure you might need to aim off for the fact that the FTSE AS has gone up 6% in the last month alone.

bigfreddiel

dunstonh wrote: »

I think you are mistaken on what an IFA is there to do. There is no way that four years ago an IFA would know which the best fund is going to be over the next four years.

now this where ifas go wrong and have a reputation - they don't explain in plain english what they do nd what their advice is all about

this is quite obvious by the tone of the original post and their expectations

no one can predict how wellor bad an investment will do - not even the boe guv - just look at inflation predictions

all an ifa can do is explain theoretical risks (some i've met couldn't even do that) and how to minimise risk and maximise returns according to their clients risk appetite.

actually picking any investment by an ifa is pointless - after all they used to pick funds that maximised their commision - now they are on an hourly rate their recommendations include other things like it's (never picked in the pre-rdr world because no commision!)

what should be done is to pick an investment strategy, bonds/equities/property/cash mix -pick the cheapest funds/its/etfs - explain to customer expected return and their options and go for it - now if thats worth £100/hour then your sales will just fly

see ya

fj

dunstonh

ctually picking any investment by an ifa is pointles

that is just silly. Lets put everyone in the same fund on that basis.

after all they used to pick funds that maximised their commision -

Funds didnt pay different commission. No evidence has ever been found of commission bias on a widespread basis.

now they are on an hourly rate

hardly any go by hourly.

their recommendations include other things like it's (never picked in the pre-rdr world because no commision!)

And you have gone round 20,000 IFAs to find that out?

what should be done is to pick an investment strategy, bonds/equities/property/cash mix -pick the cheapest funds/its/etfs - explain to customer expected return and their options and go for it - now if thats worth £100/hour then your sales will just fly

That would result in FCA enforcement action and fines as well as redress being payable. i.e. bad advice.