AVC fund allocation - is it in the right places?

inthebubble

As I carry on this process of further educating myself about my money, with your help, I'd like to know whether my AVC funds (to which I am no longer contributing) are in the right place.

I'm stuck with the Pru as a provider, as that's the choice of my scheme adminstrator.

And the Pru offers me about 30 funds, none of which appear on Hargreaves Lansdown's recommended list (which has been my only guide). There are some cash funds, and various bonds.

I am now 52. It looks as though I might take my these AVCs along with my pension at 60, certainly not later. And maybe earlier if I get offered a deal to take retirement/redundancy after 55.


At the moment I have a bit over £100k in this AVC pot.


Anyway, here it is. There's no penalty for transfer - other than out of with profits - but buy and sell prices differ, I think.

BlackRock Aquila (60:40) Global Equity Index
£ 1,229

BlackRock Aquila UK Equity Index
£ 1,222

Aberdeen Life Multi-Asset (ex-Property)
£2,101

Aberdeen Life North American Equity
£727

Aberdeen Life UK Growth
£872

Prudential With Profits Cash Accumulation Fund
£18,625

Prudential Global Equity
£2,454

Prudential International Equity
£2,506

Prudential Long Term Growth
£1,236

Prudential Overseas Equity Passive
£2,494

Prudential Property
£2,493

Prudential Retirement Protection
(this is a mix of UK tracker and bonds; it moves more into bonds each year)
£15,428

Prudential Socially Responsible
(more UK equity)
£3,311

Prudential UK Equity
£857

Prudential UK Equity (Passive)
£52,457

Prudential UK Specialist Equity
£2,365


It looks a bit UK heavy now I come to look at it...!

I have some good FS pensions to kick in at 60 (along with these funds) so I might not feel too risk averse with some of this, though the fact that I might not easily be able to control the date on which I cash it in is a limiting factor.

Any thoughts, questions, much appreciated.

Thanks

inthebubble

Your_Hero

How did you come to choosing those funds? It looks like you've basically chosen most of the funds that are available with little regard to risk/reward, or overall asset allocation.

You should check the weighted asset allocation now and see how that fares with the risk you want to take and the diversification you're looking to achieve in view of your intended retirement age.

Drp8713

It looks like you have a similar choice of funds as I do with my Pru AVC,

They dont have enough single geographical sector funds to create your own asset allocation so unless they are being used because you dont agree with the asset allocation of one of the multi asset funds and a trying to top a sector up, they are a bit pointless.

I went passive, as their active funds and the property fund especially seem to be dogs (or consistant 3rd and 4th quartile performers if you prefer).

I chose just the long term growth as 100% equities suits my 35-40 year timeframe, which was a bit overweight in the UK, but a. That might not be such a bad thing in te current climate and b. i have a S&S ISA and SIPP where i can rebalance things.

inthebubble

You got me rumbled, Your Hero.


These fund choices accrued over time, for different reasons.


What all this has made me realise is that I should seek the advice of an IFA for help with:


- balancing this AVC portfolio and ISAs
- taking out a new DC pension (suggested by others on this board as a better vehicle than LGPS AVCs to bridge the gap between early retirement and unreduced DB payout)
- other new savings/investments
- most tax efficient treatment of small income I receive through a company as a director and whether I should pay it into a pension


I've had a poke about on unbiased.co.uk


Near me is a small firm, badged as a Chartered Financial Planners, where one typical partner has these qualifications:




G30 - Business Financial Planning (CII)
G60 - Pensions (CII)
J05 - Pension Income Options (CII)
G20 - Personal Investment Planning (CII)
AFPC - Advanced Financial Planning Certificate (CII)
CF6 - Certificate in Mortgage Advice (CII)
CeMAP - Certificate in Mortgage Advice and Practice (IFS)
G10 - Taxation and Trusts (CII)
J04 - Pension Funding Options (CII)


Does that sound OK to you? Anything else I should think of?


I am very appreciative of all the patient help I've had so far, so many thanks to all of you.

Your_Hero

inthebubble wrote: »

You got me rumbled, Your Hero.

These fund choices accrued over time, for different reasons.

What all this has made me realise is that I should seek the advice of an IFA for help with:

- balancing this AVC portfolio and ISAs
- taking out a new DC pension (suggested by others on this board as a better vehicle than LGPS AVCs to bridge the gap between early retirement and unreduced DB payout)
- other new savings/investments
- most tax efficient treatment of small income I receive through a company as a director and whether I should pay it into a pension

I've had a poke about on unbiased.co.uk

Near me is a small firm, badged as a Chartered Financial Planners, where one typical partner has these qualifications:

G30 - Business Financial Planning (CII)
G60 - Pensions (CII)
J05 - Pension Income Options (CII)
G20 - Personal Investment Planning (CII)
AFPC - Advanced Financial Planning Certificate (CII)
CF6 - Certificate in Mortgage Advice (CII)
CeMAP - Certificate in Mortgage Advice and Practice (IFS)
G10 - Taxation and Trusts (CII)
J04 - Pension Funding Options (CII)

Does that sound OK to you? Anything else I should think of?

I am very appreciative of all the patient help I've had so far, so many thanks to all of you.

They look fine to me. Make sure they are independent and not restricted (although, 'whole of market' for pensions could be ok).

The first meeting is the most important so make sure you are prepared and that you can trust the IFA. You are not obliged to do business with them if you don't feel it's in your best interest.

FatherAbraham

inthebubble wrote: »

Does that sound OK to you? Anything else I should think of?.

Bah, it sounds overworked.

This si a £100k fund, which isn't even your entire retirement-provision pot. Your worse case scenario is underpinned by your defined-benefit pensions available at 60. This means you can consider taking more risk or uncertainty than would be the case if you didn't have those safe promises of income which DB pensions give.

A really simple mix might be 20% gilt, 80% equity. For the equity portion, the Prudential Long-term Growth Fund would give you a passively-managed 50-50 split between UK and non-UK equity markets.

Incidentally, your description of the Prudential Retirement Protection Fund sounds wrong to me: my Prudential GPP fund options guide (10/2013) says it's a passively-managed tracker of the FTSE A British Government Over-15-Years Gilt Index. It might be just what you need for the gilt portion. (What you've described sounds more life Lifestyling.)

Neither of those funds would be a problem to cash in on the day you wanted. The ones to watch out for in that respect would be With-Profits and the Property Fund.

Warmest regards,
FA