Self Administration of Pension Fund

Linton

OldMusicGuy wrote: »

If any tradesperson does a poor job, I can try to get my money back. IFAs/FAs always win no matter what the quality of their advice is (look at wealth management firms for example). There is no downside for them. Only egregious rule breaking will be punished.

......

You can get full compensation from an IFA for the results of bad advice - why else do they have to spend large amounts of money on liability insurance?

bostonerimus

AlanP wrote: »

I'm sorry but that is awful advice and doesn't answer the OPs question.

Moving to a DIY platform MAY be the best solution for the OP but I would suggest that moving it, choosing the funds and "shares" you want is a lot more lucky dip than using a professional to advise and guide you.

Do you feel robbed when you use a mechanic, builder, electrician or plumber? They are all easy to DIY.

You can remove a lot of the "lucky dip" part of investing by using indexes. That way you can be pretty certain that you'll end up near the middle of any distribution of returns from portfolios with similar asset allocations. As far as asset allocation goes stick to asset distributions close to the efficiency frontier of historical portfolios. I have a roughly 75% equity to 25% bond index portfolio that has returned an annual average of 9.8% over the last 10 years and 8.6% over that last 30. That's good enough for me and it didn't take a lot of work. The trick is to filter out all the unnecessary stuff that the pundits and the financial industry throws at you and realized that you don't need to be clever or employ sophisticated analysis to be a successful long term investor; simple common sense will get you most of the way there.

OldMusicGuy

Linton wrote: »

You can get full compensation from an IFA for the results of bad advice - why else do they have to spend large amounts of money on liability insurance?

Not for poor quality or indifferent advice. It has to be bad in terms of rule-breaking (like investing in non-regulated investments). Investing in poor performing funds while still getting full payment for example. There is no downside to poor performance and that's a concept I personally do not like, which is why I DIY.

dunstonh

I'm sorry but that is awful advice and doesn't answer the OPs question.

You are right to say that.

The OMW pension could be on charge basis 1 or 2. If so, that means it has a platform charge of around £70 a year (not percentage based). If moved from wealth select to self select (either via IFA or direct) then it can be one the cheapest pensions on the market.

AlanP_2

bostonerimus wrote: »

You can remove a lot of the "lucky dip" part of investing by using indexes. That way you can be pretty certain that you'll end up near the middle of any distribution of returns from portfolios with similar asset allocations. As far as asset allocation goes stick to asset distributions close to the efficiency frontier of historical portfolios. I have a roughly 75% equity to 25% bond index portfolio that has returned an annual average of 9.8% over the last 10 years and 8.6% over that last 30. That's good enough for me and it didn't take a lot of work. The trick is to filter out all the unnecessary stuff that the pundits and the financial industry throws at you and realized that you don't need to be clever or employ sophisticated analysis to be a successful long term investor; simple common sense will get you most of the way there.

Possibly true, I'm happy with index funds in the main so can't disagree with your premise but that is not what Realtimeblues suggested to the OP is it?

AlanP_2

OldMusicGuy wrote: »

If any tradesperson does a poor job, I can try to get my money back. IFAs/FAs always win no matter what the quality of their advice is (look at wealth management firms for example). There is no downside for them. Only egregious rule breaking will be punished.

And for the things I can DIY, I do a better job than tradespeople because I take my time over it (you should see the quality of the window frames I have just painted).

So I do feel that paying an IFA is an unnecessary expense where they always win however good or bad the service. Very different to employing tradespeople. But that's me. Like I said, not everyone feels the same way, and not everyone can paint window frames to the quality that I can. Similarly, not everyone feels confident DIY investing, in which case using an IFA makes sense.

Another problem is that good IFAs can be hard to find.

Yes, and as you said earlier it took you 5 years to get comfortable with it. I'm the same, its taken me a while as well.

RealtimeBlues is not suggesting that the OP take his time and think about what he wants to invest in though. He is suggesting moving it and then picking a random selection of funds and SHARES to avoid lucky dip with an IFA. That is what I disagreed with.

bostonerimus

AlanP wrote: »

Possibly true, I'm happy with index funds in the main so can't disagree with your premise but that is not what Realtimeblues suggested to the OP is it?

Realtimeblues wasn't very specific, but I'm with you on the use of indexes because I think they give the best chance of success for most people if they are sensibly managed. The key is to just be sensible. The only skill involved is seeing through the masses of choice and information that obscure the pretty simple things people need to do to be successful.

Dr_Thrifter

"The OMW pension could be on charge basis 1 or 2. If so, that means it has a platform charge of around £70 a year (not percentage based). If moved from wealth select to self select (either via IFA or direct) then it can be one the cheapest pensions on the market."

Thank you. It is currently with OMW Wealth Select (Managed Portfolio Service). This appeared to me, (perhaps naively) to be sufficiently actively managed with inputs from various other professional experts/organizations and subject to specific client objectives and personal risk tolerance profiles, that I had the impression that there was nothing else needing to be done (neither by a IFA, nor by me), possibly in perpetuity. If my perception is wrong I would be very grateful to be corrected. I understand this may be beyond the scope of the forum but any pointers would be gratefully received. I understand I am not permitted to interface directly with OMW Wealth Select, although it appears that the Pension Trustees company which holds my pension is permitted to, tho it maybe beyond their usual remit. I am wondering if you mentioned switching to their "Self Select" vehicle because this would allow the client to interface directly with OMW without using a IFA, or are there additional reasons it may be better/cheaper? This specific idea struck me as maybe do-able for a beginner and not too far removed from my current set up. I am however very thankful for all responses received and will be studying and following up links and suggestions at least to the limits of my understanding. It may be that I have to do a lot more studying and will read John Edwards book (thank you to 'OldMusicGuy') on DIY Pensions for starters.

bostonerimus

To truly DIY you pick your own funds and manage the resulting portfolio. You'll be paying for OMW Wealth Select to manage your portfolio and for the IFA and for fund fees and for platform fees. You can eliminate the wealth management and IFA fees if you DIY. You need to do some basic research and acquire some common sense skills to successfully DIY and the financial industry has a vested interest in making it seem scary and overly complicated.

AnotherJoe

Dr_Thrifter wrote: »

I would be really grateful if anyone can advise or share their own experience of self managing their pension, thus saving the cost of a IFA?

https://theescapeartist.me/2015/09/07/honey-i-fired-the-financial-adviser/