Am I optimising my pension

gramochroi

I have £280K invested in a VLS 40% SIPP which has earned about £8K since last December. I am paying a financial advisor to manage this money, but have had no conversation since it was first invested. Being totally clueless, I wonder if this money should be working harder for me?

bowlhead99

gramochroi wrote: »

I have £280K invested in a VLS 40% SIPP which has earned about £8K since last December. I am paying a financial advisor to manage this money, but have had no conversation since it was first invested.

Investing's for the long term.

If you've been invested in the product with the advistor for significantly longer than just the six months since December, maybe you're overdue for a catchup - but then you probably wouldn't have just quoted the returns since December.

If it was first invested with them only last December, is there any particular reason you want or need a conversation about it already? If you ask for a conversation, will you get one? Presumably you will, if you're paying an advisor for ongoing advice and 'managing the money' (though more likely, reporting on its performance and ongoing suitability; you could just call them up and ask for a chat or meeting.

Being totally clueless, I wonder if this money should be working harder for me?

I doubt it.

If you are indeed totally clueless and not really familiar with the sort of returns (both up and down) you might get from investments and how it all works, it probably makes sense that the advisor suggested this type of fund which is simple and relatively more cautious than some other options.

If you had instead invested (for example) in the Lifestrategy 100% Equity product (rather than the 40% Equity that you ended up being advised to buy), and it had halved in value over a year or two as he market went down - and you were, as you say, 'totally clueless' - it might have sent you into a blind panic, causing you to demand the advisor help you sell it ASAP, then you miss the recovery when the market goes up again, with the net result that you've lost half your life savings. So a fund like this towards the more cautious end of the scale could be fine.

You mention gaining £8k since last December is now £280k. So that implies back in December it was worth something like £272k. Which is a gain (8 on 272) of about 2.9%, in only half a year. Six months is a short timescale over which to judge any sort of investment, but if that continues over the long term it will be giving you annual returns about twice as much as inflation. Which seems fine for someone who is both cautious and clueless.


No offence intended - simply, clueless by your own admission, and cautious as my assumption from the type of fund the investor advised you to buy after discussing options with you.

Even if you were not clueless and spent some time researching all your options independently rather than needing advice: 3% every six months or 6% a year (which is about 3% more than inflation per year) would probably be a reasonable result that you wouldn't beat without taking more investment risk. But markets go up and down all the time so the last 6 months isn't necessarily representative of what you'll get over the next decades or so.

dunstonh

gramochroi wrote: »

I have £280K invested in a VLS 40% SIPP which has earned about £8K since last December. I am paying a financial advisor to manage this money, but have had no conversation since it was first invested. Being totally clueless, I wonder if this money should be working harder for me?

Have you employed the adviser to provide ongoing servicing? Or was it a transactional piece of advice (i.e. one off/ad hoc)

VLS40 is a popular fund for smaller investors or transactional advice investors. Or investors that are relatively new to investing or rather clueless about investing. So, it seems to fit your description.

Terry_Towelling

Just an observation from a rank amateur until the ones-who-know reply to you.

The money is probably working as hard as it does within the chosen fund. The question is whether you need to pay an intermediary an ongoing fee to manage things for you? You will already be paying an annual fee in fund management charges to the fund manager (a small percentage of the fund value).

I guess if you are unsure about things it pays to get professional advice but once the cash is invested, isn't it just a case of watching how it performs and choosing when to draw income/switch funds?

I'm probably wrong about this (someone will jump on me soon). Perhaps you've only paid a one-off fee for the advice on which fund to plump for. That could be why you've not heard anything from them because there isn't anything else to do.

Wildsound

gramochroi wrote: »

I am paying a financial advisor to manage this money, but have had no conversation since it was first invested.

How much is this "adviser" charging you? Is this on an ongoing basis? Sounds like he's not particularly managing it for you by just dumping it into a VLS fund...

kinger101

I don't think anyone can possibly give a reasonable answer. 6 months is too short a time-frame to measure performance over, and you've not provided any additional circumstances (age, attitude to risk, when you'll retire, how you'll take your pension).

I'd be concerned if everything was dumped in one fund. You should at least speak to the advisor first, but unless you planned to be entirely silent on ignorant of what his plan was, it sounds like you're paying money for old rope.

kidmugsy

I'd be worried that someone has implanted the ludicrous expression "working harder" into your brain.

Alexland

Wildsound wrote: »

How much is this "adviser" charging you? Is this on an ongoing basis? Sounds like he's not particularly managing it for you by just dumping it into a VLS fund...

Would you rather the advisor created a massively complicated allocation requiring regular analysis, rebalancing and fine tuning so they could be seen to making trades and 'earning' their fee? If a low cost multi asset fund is the right answer for the OP's needs then that's a nice simple solution.

Alex.

Thrugelmir

gramochroi wrote: »

I wonder if this money should be working harder for me?

Are you expecting a higher return?

bostonerimus

gramochroi wrote: »

I have £280K invested in a VLS 40% SIPP which has earned about £8K since last December. I am paying a financial advisor to manage this money, but have had no conversation since it was first invested. Being totally clueless, I wonder if this money should be working harder for me?

How old are you and what is your attitude to risk? Are you worried about losing money more than having your money grow?

VLS40 is one of a popular family of "all in one" funds and might well be a good choice for you. However, if this is the extent of the portfolio under "advisor management" then it's easy money for you advisor