Financial advisor is outperforming Vg LifeStrategy 80. Should I keep him?

Playing_with_Fire_2

bowlhead99,

Thanks for your reply to my comments.

My point is that IF the OP believes that investing is a zero sum game, that you can win by 'loosing the fewest points', and that cutting costs by going passive in everything is the way to do this (as Tim Hale and web articles suggest) THEN they should cut out the FA.

While FA's and fund managers don't intend to be lucky, by definition they cannot all be above average, and after costs many will be below average.

Whether to go DIY+ passive or use a FA is a personal choice. My understanding is that the OP has decided that DIY and passive is what they believe to be best for them, so I've responded on that basis.

Re "I can't see how the factors in that sentence could possibly convince you that passive funds were better value."

My belief is that passive is better, I'm young enough that I can accept volatility, I'm not going to panic sell after a drop. Everytime I/the fund purchase or sell an asset to smooth out the bumps costs are incurred, which isn't my aim. It is not a bad aim, but it isn't mine.

My point was that I have decided that passive is best for me, the decision is made and I'm going to sell the active fund. Given that this is going to happen, by selling after the drop, when the active fund has dropped less, I'm buying more units of the passive fund I want. The active fund was the default selected for me when my work pension moved over to a new scheme, so yes it was a sub-optimal choice for me, not because of the returns but because the asset allocation didn't match what I wanted. This wasn't a bad decision but a decent default made by work that wasn't right for me. It was the timing in buying the passive fund after a drop that I felt was better value. I would have still switched over regardless of what the funds had been doing.

I personally have different passive funds to gain exposure to smaller, value and other markets to balance out the UK and large company bias. You are of course right that the balance of growth risk reward etc are different to whether a fund is active or passive and DIY or through an FA, I wasn't trying to suggest otherwise.

My point remains that IF the OP believes that a DIY LS 80 Acc is the right fund and approach for them, THEN they should switch now and not look back.

There are other approaches which would be better for someone else, and it was not my intention to chime in on whether or not this was the right approach for the OP. Similarly, I'm happy with my choices and am glad if you are happy with yours. Even though our approaches are different they can both be correct for our circumstances and personality.