IFA Advises Pension Move to True Potential : Thoughts Please?

cfw1994

GSP said:

OldMusicGuy said:

GSP said:

I asked earlier but didn’t get a response if someone could please oblige.
Say if you had a dc pot containing x amount, had come up to the time you could withdraw it. What would be the very first steps you do to get invested, or rather starting from scratch (as its probably already of sorts invested anyway), and get into something you want to manage.
Are there good books to read, a beginner’s/idiot’s guide to investing?
I keep seeing messages about managing your own, looking after your own money, but to do that how do you get to that level and have the confidence to do that from zero. The attraction of an IFA is that it comes ‘ready packaged’. How do you get to something more like their level in a short time if they have taken many years to get there?

You read these books:
DIY Simple Investing: A Guide to Simple but Effective Low Cost Investing by John Edwards
Investing Demystified by Lars Kroijer

You spend time on the Monevator website and watch some PensionCraft videos. You read some helpful threads on here (like jamesd's thread on safe withdrawal rates). Then you make some simple investment choices appropriate to your risk profile and pension objectives. You keep it simple and save yourself a fortune in IFA fees. I know, because I've done it. I had no investment knowledge five years ago, now I manage my own DC pot (and I do not have the security of a DB pension). 

Do you have any nagging doubts your choices of holdings have been the right ones with so many out there? Thanks for the titles.

There are thousands of funds out there.
If that is your concern, then wouldn’t you also be concerned that the IFA/FA helping you manage the funds will pick the wrong ones too?   

There is no Ladybird Book of Fund Choices.   Only fact sheets, with risk ratings, holdings, past performance, etc, thrown in with a smattering of experience, rumour, knowledge etc.

You phrase your question strangely.  Your DC pot *is* already invested.  Given one might be hoping for a lengthy retirement, one might keep it just as invested the day after drawdown as it was the day before.  Sure, you need to figure out your drawdown strategy (what to take and when), but if you are only then looking at how to invest it, you are thinking too late, surely?

I strongly recommend you to take time to watch the short Lars Kroijer videos here.  Invest broadly and cheaply.

If that doesn’t help alleviate your fears, then it feels that you might be the sort of person who needs an IFA.    Many people do.   Many here manage their own, because this is a money saving site, but that doesn’t mean everyone should.

GSP

cfw1994 said:

GSP said:

OldMusicGuy said:

GSP said:

I asked earlier but didn’t get a response if someone could please oblige.
Say if you had a dc pot containing x amount, had come up to the time you could withdraw it. What would be the very first steps you do to get invested, or rather starting from scratch (as its probably already of sorts invested anyway), and get into something you want to manage.
Are there good books to read, a beginner’s/idiot’s guide to investing?
I keep seeing messages about managing your own, looking after your own money, but to do that how do you get to that level and have the confidence to do that from zero. The attraction of an IFA is that it comes ‘ready packaged’. How do you get to something more like their level in a short time if they have taken many years to get there?

You read these books:
DIY Simple Investing: A Guide to Simple but Effective Low Cost Investing by John Edwards
Investing Demystified by Lars Kroijer

You spend time on the Monevator website and watch some PensionCraft videos. You read some helpful threads on here (like jamesd's thread on safe withdrawal rates). Then you make some simple investment choices appropriate to your risk profile and pension objectives. You keep it simple and save yourself a fortune in IFA fees. I know, because I've done it. I had no investment knowledge five years ago, now I manage my own DC pot (and I do not have the security of a DB pension). 

Do you have any nagging doubts your choices of holdings have been the right ones with so many out there? Thanks for the titles.

There are thousands of funds out there.
If that is your concern, then wouldn’t you also be concerned that the IFA/FA helping you manage the funds will pick the wrong ones too?   

There is no Ladybird Book of Fund Choices.   Only fact sheets, with risk ratings, holdings, past performance, etc, thrown in with a smattering of experience, rumour, knowledge etc.

You phrase your question strangely.  Your DC pot *is* already invested.  Given one might be hoping for a lengthy retirement, one might keep it just as invested the day after drawdown as it was the day before.  Sure, you need to figure out your drawdown strategy (what to take and when), but if you are only then looking at how to invest it, you are thinking too late, surely?

I strongly recommend you to take time to watch the short Lars Kroijer videos here.  Invest broadly and cheaply.

If that doesn’t help alleviate your fears, then it feels that you might be the sort of person who needs an IFA.    Many people do.   Many here manage their own, because this is a money saving site, but that doesn’t mean everyone should.

Thanks. You would ‘hope’ that the IFA is exposed to more dealings, more information, more knowledge who to invest with ‘running things’ for other customers too day to day. Have their finger on the pulse so to speak. From that, I would guesstimate they are best placed to make a decision like that perhaps.
Yes, sorry just my lack of knowledge here as I was transferred and straight into drawdown on pot. People putting money into dc schemes are already invested.

BritishInvestor

GSP said:

cfw1994 said:

GSP said:

OldMusicGuy said:

GSP said:

I asked earlier but didn’t get a response if someone could please oblige.
Say if you had a dc pot containing x amount, had come up to the time you could withdraw it. What would be the very first steps you do to get invested, or rather starting from scratch (as its probably already of sorts invested anyway), and get into something you want to manage.
Are there good books to read, a beginner’s/idiot’s guide to investing?
I keep seeing messages about managing your own, looking after your own money, but to do that how do you get to that level and have the confidence to do that from zero. The attraction of an IFA is that it comes ‘ready packaged’. How do you get to something more like their level in a short time if they have taken many years to get there?

You read these books:
DIY Simple Investing: A Guide to Simple but Effective Low Cost Investing by John Edwards
Investing Demystified by Lars Kroijer

You spend time on the Monevator website and watch some PensionCraft videos. You read some helpful threads on here (like jamesd's thread on safe withdrawal rates). Then you make some simple investment choices appropriate to your risk profile and pension objectives. You keep it simple and save yourself a fortune in IFA fees. I know, because I've done it. I had no investment knowledge five years ago, now I manage my own DC pot (and I do not have the security of a DB pension). 

Do you have any nagging doubts your choices of holdings have been the right ones with so many out there? Thanks for the titles.

There are thousands of funds out there.
If that is your concern, then wouldn’t you also be concerned that the IFA/FA helping you manage the funds will pick the wrong ones too?   

There is no Ladybird Book of Fund Choices.   Only fact sheets, with risk ratings, holdings, past performance, etc, thrown in with a smattering of experience, rumour, knowledge etc.

You phrase your question strangely.  Your DC pot *is* already invested.  Given one might be hoping for a lengthy retirement, one might keep it just as invested the day after drawdown as it was the day before.  Sure, you need to figure out your drawdown strategy (what to take and when), but if you are only then looking at how to invest it, you are thinking too late, surely?

I strongly recommend you to take time to watch the short Lars Kroijer videos here.  Invest broadly and cheaply.

If that doesn’t help alleviate your fears, then it feels that you might be the sort of person who needs an IFA.    Many people do.   Many here manage their own, because this is a money saving site, but that doesn’t mean everyone should.

Thanks. You would ‘hope’ that the IFA is exposed to more dealings, more information, more knowledge who to invest with ‘running things’ for other customers too day to day. Have their finger on the pulse so to speak. From that, I would guesstimate they are best placed to make a decision like that perhaps.
Yes, sorry just my lack of knowledge here as I was transferred and straight into drawdown on pot. People putting money into dc schemes are already invested.

If you are following the #2 mindset - fund selection is a long way down the list in the process. I appreciate it can seem daunting, but if you follow a methodical approach it should become a lot easier.

1. What (net, real) returns do you need to ensure you can enjoy your desired lifestyle without running out of money?
2. What does that translate into in terms of asset allocation (keeping it simple at this stage, break it down into growth (e.g. equities) defensive (e.g. high-quality bonds).
3. Would you be comfortable with the historical drawdowns given the asset allocation? If yes, go to 4, if no, go back to your desired lifestyle and modify.
4. What investing style will you use: passive,active, factor or a blend. This will form part of your investment philosophy. For example, you may say "I want to "buy the world" with a mix of equities and bonds at a low cost. Once you have got to this stage the fund selection gets a lot easier.

Why not start with #1 and allow everyone to spend the afternoon celebrating a convincing Scottish victory

BritishInvestor

GSP said:

cfw1994 said:

GSP said:

OldMusicGuy said:

GSP said:

I asked earlier but didn’t get a response if someone could please oblige.
Say if you had a dc pot containing x amount, had come up to the time you could withdraw it. What would be the very first steps you do to get invested, or rather starting from scratch (as its probably already of sorts invested anyway), and get into something you want to manage.
Are there good books to read, a beginner’s/idiot’s guide to investing?
I keep seeing messages about managing your own, looking after your own money, but to do that how do you get to that level and have the confidence to do that from zero. The attraction of an IFA is that it comes ‘ready packaged’. How do you get to something more like their level in a short time if they have taken many years to get there?

You read these books:
DIY Simple Investing: A Guide to Simple but Effective Low Cost Investing by John Edwards
Investing Demystified by Lars Kroijer

You spend time on the Monevator website and watch some PensionCraft videos. You read some helpful threads on here (like jamesd's thread on safe withdrawal rates). Then you make some simple investment choices appropriate to your risk profile and pension objectives. You keep it simple and save yourself a fortune in IFA fees. I know, because I've done it. I had no investment knowledge five years ago, now I manage my own DC pot (and I do not have the security of a DB pension). 

Do you have any nagging doubts your choices of holdings have been the right ones with so many out there? Thanks for the titles.

There are thousands of funds out there.
If that is your concern, then wouldn’t you also be concerned that the IFA/FA helping you manage the funds will pick the wrong ones too?   

There is no Ladybird Book of Fund Choices.   Only fact sheets, with risk ratings, holdings, past performance, etc, thrown in with a smattering of experience, rumour, knowledge etc.

You phrase your question strangely.  Your DC pot *is* already invested.  Given one might be hoping for a lengthy retirement, one might keep it just as invested the day after drawdown as it was the day before.  Sure, you need to figure out your drawdown strategy (what to take and when), but if you are only then looking at how to invest it, you are thinking too late, surely?

I strongly recommend you to take time to watch the short Lars Kroijer videos here.  Invest broadly and cheaply.

If that doesn’t help alleviate your fears, then it feels that you might be the sort of person who needs an IFA.    Many people do.   Many here manage their own, because this is a money saving site, but that doesn’t mean everyone should.

Thanks. You would ‘hope’ that the IFA is exposed to more dealings, more information, more knowledge who to invest with ‘running things’ for other customers too day to day. Have their finger on the pulse so to speak. From that, I would guesstimate they are best placed to make a decision like that perhaps.
Yes, sorry just my lack of knowledge here as I was transferred and straight into drawdown on pot. People putting money into dc schemes are already invested.

"Have their finger on the pulse so to speak."
There is unlikely to be anyone you can access (which is obviously a much bigger universe than just IFAs) that can give you market-beating returns. They're way too far down the food chain.

robatwork

ZingPowZing said:

Take a couple of minutes to look at the performance of their funds since inception: - first thing that strikes you, in every case, is how True Potential managed very good percentages in their first year then, after a reasonable second year progress has  dwindled to nothing, or worse, as they took on more and more passengers. The majority of investors have made nothing in the bull market of the last three years.

Very much the Jose Mourinho of the investing world.

OldMusicGuy

GSP said:

OldMusicGuy said:

GSP said:

I asked earlier but didn’t get a response if someone could please oblige.
Say if you had a dc pot containing x amount, had come up to the time you could withdraw it. What would be the very first steps you do to get invested, or rather starting from scratch (as its probably already of sorts invested anyway), and get into something you want to manage.
Are there good books to read, a beginner’s/idiot’s guide to investing?
I keep seeing messages about managing your own, looking after your own money, but to do that how do you get to that level and have the confidence to do that from zero. The attraction of an IFA is that it comes ‘ready packaged’. How do you get to something more like their level in a short time if they have taken many years to get there?

You read these books:
DIY Simple Investing: A Guide to Simple but Effective Low Cost Investing by John Edwards
Investing Demystified by Lars Kroijer

You spend time on the Monevator website and watch some PensionCraft videos. You read some helpful threads on here (like jamesd's thread on safe withdrawal rates). Then you make some simple investment choices appropriate to your risk profile and pension objectives. You keep it simple and save yourself a fortune in IFA fees. I know, because I've done it. I had no investment knowledge five years ago, now I manage my own DC pot (and I do not have the security of a DB pension). 

Do you have any nagging doubts your choices of holdings have been the right ones with so many out there? Thanks for the titles.

No, I'm very happy with my choices. I set up my portfolio to have low volatility to avoid sequence of returns risk in the early years of retirement. My objective was to minimise losses rather than maximise gains, as I have a good sized DC pot and will be decumulating through retirement. It's been interesting to see how the portfolio performed through the ups and downs of the last 12 months and so far it's been exactly as I hoped - the losses I suffered were far lower than the market drops but it's taken me longer than some to get back to where I was at the beginning of last year (I am now slightly ahead).

One of the biggest lessons I learnt was to ignore FOBP - fear of a better portfolio. My choices are perfectly adequate for what I am doing (low volatility, keep it simple, avoid IFA costs). You can become paralysed by reading threads on here from people who have gotten x% or y% returns by investing in this that or the other, so you always think there's something "better" out there. 

OldMusicGuy

GSP said:

Thanks. You would ‘hope’ that the IFA is exposed to more dealings, more information, more knowledge who to invest with ‘running things’ for other customers too day to day. Have their finger on the pulse so to speak. From that, I would guesstimate they are best placed to make a decision like that perhaps.
Yes, sorry just my lack of knowledge here as I was transferred and straight into drawdown on pot. People putting money into dc schemes are already invested.

That's where you are wrong. IFAs are NOT investment managers. They do not attend company earnings calls, they do not have any insight into economic forecasts, they do not have their finger on the pulse of the economy or individual companies. They just know what investment choices are out there and they know how to recommend some that meet your risk profile. They may also be able to help with retirement planning, pension consolidation and things like that. They provide a helpful service but nothing that IMO justifies their fees. 

fred246

A helpful service? This thread is all about someone who employed an IFA. They were a trusted advisor for a few years and then threw the customer under a bus. Shocking behaviour. Even worse the resident IFA tries to defend his behaviour.

GSP

OldMusicGuy said:

GSP said:

Thanks. You would ‘hope’ that the IFA is exposed to more dealings, more information, more knowledge who to invest with ‘running things’ for other customers too day to day. Have their finger on the pulse so to speak. From that, I would guesstimate they are best placed to make a decision like that perhaps.
Yes, sorry just my lack of knowledge here as I was transferred and straight into drawdown on pot. People putting money into dc schemes are already invested.

That's where you are wrong. IFAs are NOT investment managers. They do not attend company earnings calls, they do not have any insight into economic forecasts, they do not have their finger on the pulse of the economy or individual companies. They just know what investment choices are out there and they know how to recommend some that meet your risk profile. They may also be able to help with retirement planning, pension consolidation and things like that. They provide a helpful service but nothing that IMO justifies their fees. 

In my annual review I do receive an assessment how the year has gone, the possible outlook for the next year or two and reasoning why recommendations why some funds need to be replaced. Isn’t this a forecast and action of sorts to get through possible challenges ahead?

BritishInvestor

GSP said:

OldMusicGuy said:

GSP said:

Thanks. You would ‘hope’ that the IFA is exposed to more dealings, more information, more knowledge who to invest with ‘running things’ for other customers too day to day. Have their finger on the pulse so to speak. From that, I would guesstimate they are best placed to make a decision like that perhaps.
Yes, sorry just my lack of knowledge here as I was transferred and straight into drawdown on pot. People putting money into dc schemes are already invested.

That's where you are wrong. IFAs are NOT investment managers. They do not attend company earnings calls, they do not have any insight into economic forecasts, they do not have their finger on the pulse of the economy or individual companies. They just know what investment choices are out there and they know how to recommend some that meet your risk profile. They may also be able to help with retirement planning, pension consolidation and things like that. They provide a helpful service but nothing that IMO justifies their fees. 

In my annual review I do receive an assessment how the year has gone, the possible outlook for the next year or two and reasoning why recommendations why some funds need to be replaced. Isn’t this a forecast and action of sorts to get through possible challenges ahead?

No