Is it possible to transfer?

tony4147

The context was partial transfer as I even named a couple of funds I was interested in at that time.

dunstonh

tony4147 wrote: »

The context was partial transfer as I even named a couple of funds I was interested in at that time.

But were the funds within your scope of knowledge and understanding? (i.e. did you fully research them and they fit with your investing style or did you just hear about them in the media)

if single sector, were you looking to build a whole new portfolio of funds. Could that be done within SW? Was it even necessary to do that given you dont actually know much about your existing pension?

That is how I would have expected the discussion to go. And from the outcome of that discussion, I would not have been surprised if the bit on partial transfer got put aside as is jumping to a possible solution without knowing if there is a problem to be solved.

tony4147

We never really got into talking about the funds, my question to hime was it possible to do partial transfers into other funds if I wished, to which he came back stating that I would have to transfer everything out of pens portfolio funds 'all or nothing' is what his email states.

jamesd

tony4147 wrote: »

We never really got into talking about the funds, my question to hime was it possible to do partial transfers into other funds if I wished, to which he came back stating that I would have to transfer everything out of pens portfolio funds 'all or nothing' is what his email states.

There's always the chance that there was a restriction to having all in lifestyle or none in lifestyle when you asked. The current transfer document has a small code G1171/0914 on the second page that might indicate that it was revised in 09-14. I think that this is the first time I've seen a place that allows partial lifestyling. Before concluding that the IFA got it wrong it would be good to explicitly check with Scottish Widows if it changed and when.

In any case, not having lifestyling doesn't matter when you're paying attention because you can just do the moves you want when you want to do them. Lifestyling is really needed for people who don't pay attention and you're not in that category, even if you were at some point.

FatherAbraham

jamesd wrote: »

While nothing is guaranteed with investment returns, we do know that the lifestyling option switches money into investments that have historically had lower growth rates.

We also know that the lifestyling option switches money into investments that have historically had lower risk when compared with annuity rates, which is entirely the point. Growth is not the only game in town.

jamesd wrote: »

Of course, when it comes to planning, we know that Dr Ros Altmann wrote on 6 January 2015 that "I believe the best default option is the 'do nothing and assume ongoing investments' option". I agree with that view and think that it is a very sensible recognition that we left the UK world where everyone has to buy an annuity ten years ago. I hope that you would not have the view that her thoughts are idiosyncratic just because in this aspect they are similar to mine.

Her views are rather idiosyncratic, yes, because such an approach would be profoundly risky for someone who intended to buy longevity insurance (an annuity), rather than draw down.

Since default options tend to be used by those who are less confident about managing their money, and who are less well informed, a path which guides towards a reliable lifetime income makes more sense.

jamesd wrote: »

Similarly, The Pension Advisory Service wrote at about the same time "it is likely that a guaranteed income will form the core part of many members' retirement planning. However, with interest rates so low (and annuity rates currently poor) and annuity product ranges inflexible it is not unreasonable for members to defer purchase for some years (perhaps late 70s)".

So if annuities should be purchased in ones seventies, your advice to set the scheme retirement age to 90 is rather inappropriate, wouldn't you say?

As to annuity rates currently being "poor", perhaps you could tell us when, in the last three hundred years, there has been a moment at which purchasers thought that annuities weren't poorly priced?

Warmest regards,
FA

dunstonh

There was some research some years back. i cant locate it now but it was something like 19 of the last 25 years would have seen lifestyling result in a lower pension fund.

However, the point of lifestyling is not about maximising return but minimising loss. Someone without lifestyling getting close to retirement and suffering a 40% loss is going to have a big impact on their plans. Whereas someone with lifestyling getting 2% instead of 8% in the last year is not going to have any impact. (excuse the simplification as I am sure you get my point).

With annuities, lifestyling made sense. With drawdown, it does not as you are not looking at a fixed exit point. However, portfolio adjustments in the lead up to retirement do make sense as, typically, those in the decumulation phase tend to invest at a lower level of risk than they would in the accumulation phase and tend to have a different investment approach.

tony4147

Looking at some information I received yesterday from SW, my pension is presently split across two funds as -
55% in Pens Portfolio 2
45% in Pens Portfolio 3

I'm thinking of leaving Pens 2 untouched but transferring -

25% of Pens 3 into Pens Portfolio 1
25% of Pens 3 into SW Multi Manager UK Equity Growth Series 2
25% of Pens 3 into SW Schroder UK Smaller Companies Pension Series 2
25 % of Pens 3 remains.

Any thoughts?

dunstonh

tony4147 wrote: »

Looking at some information I received yesterday from SW, my pension is presently split across two funds as -
55% in Pens Portfolio 2
45% in Pens Portfolio 3

I'm thinking of leaving Pens 2 untouched but transferring -

25% of Pens 3 into Pens Portfolio 1
25% of Pens 3 into SW Multi Manager UK Equity Growth Series 2
25% of Pens 3 into SW Schroder UK Smaller Companies Pension Series 2
25 % of Pens 3 remains.

Any thoughts?

You are mixing and matching multi-asset funds with single sector funds and breaking a researched asset allocation. What makes you think that your knowledge is better than theirs? Why do you want to go so heavy into UK equity?

tony4147

I don't think I know better than 'researched asset allocation' but I am prepared to take some risk and looking at the 5 year performance figures the UK Equity Growth and UK smaller companies have performed very well.
Before I do anything I will be discussing this with my IFA.

dunstonh

tony4147 wrote: »

I don't think I know better than 'researched asset allocation' but I am prepared to take some risk and looking at the 5 year performance figures the UK Equity Growth and UK smaller companies have performed very well.
Before I do anything I will be discussing this with my IFA.

5 years is just half an economic cycle and, importantly, the last 5 years only covers a growth period. No real negatives in there. So, if you look only at performance, you are broadly getting the highest risk funds giving the highest returns. They will be the same funds that suffer the biggest losses during negative periods. You need to include both negative and positive and average out. To do that, you need 10 years past performance to get a more realistic flavour.

If you are prepared to take increased risk then that does not mean you break the asset allocation models. You just move up the risk scale with asset allocations suitable for that higher risk level. Spiking one sector (in this case UK equity) increases the risk but not in a good way. You are gambling on UK being the best area (and it rarely is).