Acceptable growth

dunstonh

Originally in Met lIfe now with Aviva; don't have names of products to hand...

Met Life was typically used when a protected fund was the preferred option.  i.e. some degree of capital security.   Problem is that comes at a cost in both charges and return.      Aviva have a smoothed fund as well that is better value but their platform is whole of market.    

[Deleted User]

Over that period of time, the return is unacceptable.  He could have bought USD, put them under the pillow and the “return” would have been about the same.  

If you account for inflation, that money did next to nothing over the period when stocks and bonds produced very good returns.  

I can’t imagine lack of real return being “safe” for any 100k portfolio.  Its distinctly unsafe to anyones retirement plans,  

Now... If you and your other half have lots of money and about to retire or in retirement then this is less of an issue. If your other half is young then his risks were completely misrepresented and investment choices inappropriate.  But even in the former case, your OH hasn’t touched the money for nearly a decade. 

Over that period of time stock market is a pretty safe investment, at least thats what the history tells us. Could have had that money in the world stock market with much loser costs, similar downside risk and massively higher upside.  As it is, the money was working well, just not for your OH. 

Either way, he should read a couple of good books on risks and asset allocation and ensure that total costs are much lower. 

MK62

zagfles said:

Very low returns, can't believe anyone could have got such low returns unless invested mostly in cash, which over an 8 year period would be crazy even for someone with a low risk tolerance. Or maybe charges were high.

It depends what the investor agreed on with the IFA back in 2012.
As another poster has said "low attitude to risk" is a bit generic and likely means different things to different people.......if the pension had been invested in a UK Gilt fund, for instance (perhaps not unreasonable given the possible risk constraints here), then the current value looks well within that ballpark (considering the likely charges as well).

It's not what many of us would have done, for sure, but if the investor wanted low risk, that's likely what was then provided.....

ElephantBoy57

howeller_2 said:

Hi have posted here intermittently but have a simple question today to try and help me make a decision.
My OH has had a pension invested since October 2012. He invested £108000 with IFA advice which he is still receiving. It was worth £135000 as of today. Low attitude to risk so no bells and whistles. Do we think thats an acceptable outcome?

The FTSE was 5900 in 2012 and its only 6550 now, that is taking the worst/best figures from 2012, it doesnt look that bad when you compare it to the that.

garmeg

ElephantBoy57 said:

howeller_2 said:

Hi have posted here intermittently but have a simple question today to try and help me make a decision.
My OH has had a pension invested since October 2012. He invested £108000 with IFA advice which he is still receiving. It was worth £135000 as of today. Low attitude to risk so no bells and whistles. Do we think thats an acceptable outcome?

The FTSE was 5900 in 2012 and its only 6550 now, that is taking the worst/best figures from 2012, it doesnt look that bad when you compare it to the that.

What about the dividends which are excluded from the 2 FTSE-100 values? That must add another 4% pa.

OldMusicGuy

The return is low by the standard of most of us on here, but your husband said "low risk" and that's what you got. So if you are not happy with the returns, it's not the IFAs fault, it's yours. It's easy to look back over a period when returns could have been better than what you got and think "why didn't the IFA do better, after all he/she is an "expert"? But the IFA followed your instructions. The pension hasn't gone down, and it's kept pace with inflation. So pretty low risk, exactly as you said.

If you wanted the pension to grow, then you should have gone for a higher level of risk. If you wanted to protect what you had, then the IFA has done their job. You are now looking back and implying that the IFA should have somehow ignored what your husband said and been more aggressive because the IFA knew better returns were available. It doesn't work like that.  

I know because I made exactly the same mistake. I got an adviser to put a portfolio together for me and said low risk. He followed my instructions and it was only when I started educating myself about pensions and investments on here (and other places) I realised I was making a mistake. I should have been invested at a higher (but not extreme) risk level to get growth. It's only close to retirement that I should have gone more defensive.

So hopefully the low returns you got might make your husband think about investment objectives longer term. If you want an "acceptable" level of growth, maybe increase the risk level.   

howeller_2

Thanks for all your replies. To give context this investment started after crystalizing and taking out 25% tax free. OH was 60 and still working with no plans to drawdown. Finished working at 65 and uses savings to supplement state pension. He is now 68