Transferring out of Defined Benefit pension

zagfles

AlanP_2 said:

Deleted_User said:

The focus on recent performance isn’t a good way of approaching it.  

One needs to invest a bit of time in designing an appropriate asset allocation.  Then pick a good vehicle(s) to implement.  

And yes, cost is important because its the only thing impacting future performance which is certain.  

Recent performance is only meaningful in the context of checking that the fund/portfolio performed during major events as you expected it would.  Otherwise its a bad criterion, although apparently favoured by IFAs. 

It seems to me that it isn't IFAs that focus on performance (as in returns), as per this comment from ZPZ:

2) Should be your major consideration. Your investment journey is likely to be a long run and your choices will almost certainly impact the ongoing value by six figures quite soon. For example, if your adviser had ushered you into True Potential three years ago, instead of a popular benchmark like VanguardLifestrategy - your portfolio would be adrift a minimum of £80,000 already, on any of either's five risk profiles. In fact, TP's agressive portfolio has performed worse than VL20.
This deficit would be aside from on-going fees.

So would you see one of the TP portfolios as a better option than one of the VLS (or competitor) options based on perfromance as in excpected behaviour? Sounds to me like you would as the if the TP option is expected to underperform VLS and it goes on to actually underperform then it meets your criteria. 

Returns must be a factor you consider otherwise every poor fund would be deleivering what was expected of it and thus a good candidate for inclusion in your portfolio/

The job of an adviser isn't to deliver star performance, if you believe in past performance being a guide to future returns then find star fund managers, it's their job to deliver star performance against benchmarks.

Of course some people actually believe the "past performance is not a guide to future performance" you see everywhere.

Prism

zagfles said:

The job of an adviser isn't to deliver star performance, if you believe in past performance being a guide to future returns then find star fund managers, it's their job to deliver star performance against benchmarks.

Of course some people actually believe the "past performance is not a guide to future performance" you see everywhere.

Past performance is no a guarantee but its certainly a guide regardless of the legalese. I would want to see the past performance of an IFA the same as I would a fund manager. It wouldn't be my prime criteria but I wouldn't likely select an IFA or fund manager that consistently underperformed their benchmarks even if they were excellent in other ways, unless there was a good reason for it. 

dunstonh

Investment management is commoditised. Anyone relying on selling superior performance has got a limited shelf life, IMO.

Absolutely.    
I sometimes think that gets confused on here with some because they assume that VLS is the best and nothing can beat it. When in reality, plenty of people do (both on DIY basis and advised).   So when examples are shown of things that have had a record of beating it, they cannot understand that and post negatively.  It is a bit damned if you do and damned if you don't.  If you don't evidence it they claim it's not possible.  If you evidence it, then they claim its dodgy sales.       They are a bit like flat earth believers.

The key driver in any investment recommendation from an adviser is suitability.  Not outperformance.  

zagfles

Prism said:

zagfles said:

The job of an adviser isn't to deliver star performance, if you believe in past performance being a guide to future returns then find star fund managers, it's their job to deliver star performance against benchmarks.

Of course some people actually believe the "past performance is not a guide to future performance" you see everywhere.

Past performance is no a guarantee but its certainly a guide regardless of the legalese. I would want to see the past performance of an IFA the same as I would a fund manager. It wouldn't be my prime criteria but I wouldn't likely select an IFA or fund manager that consistently underperformed their benchmarks even if they were excellent in other ways, unless there was a good reason for it. 

If you're going to research past performance, why bother with an IFA, just research fund managers. It's their primary job to deliver performance against benchmarks, it's not the primary job of an IFA. If you're knowledgable enough to research past performance taking into account risk, diversity, performance in different market conditions etc then you're likely to be knowledgable enough not to need an IFA.

zagfles

dunstonh said:

Investment management is commoditised. Anyone relying on selling superior performance has got a limited shelf life, IMO.

Absolutely.    
I sometimes think that gets confused on here with some because they assume that VLS is the best and nothing can beat it. When in reality, plenty of people do (both on DIY basis and advised).   So when examples are shown of things that have had a record of beating it, they cannot understand that and post negatively.  It is a bit damned if you do and damned if you don't.  If you don't evidence it they claim it's not possible.  If you evidence it, then they claim its dodgy sales.       They are a bit like flat earth believers.

The key driver in any investment recommendation from an adviser is suitability.  Not outperformance.  

Has anyone actually said that? Maybe someone on my ignore list did. Bog standard global trackers have beaten VLS100, as discussed here a lot. I have. It's hardly an achievement.

However, I still quite like VLS and their home bias which they have good reason for (and was a reason for underperformance in recent years). As you say, the key is suitability, not outperformance.

Prism

zagfles said:

Prism said:

zagfles said:

The job of an adviser isn't to deliver star performance, if you believe in past performance being a guide to future returns then find star fund managers, it's their job to deliver star performance against benchmarks.

Of course some people actually believe the "past performance is not a guide to future performance" you see everywhere.

Past performance is no a guarantee but its certainly a guide regardless of the legalese. I would want to see the past performance of an IFA the same as I would a fund manager. It wouldn't be my prime criteria but I wouldn't likely select an IFA or fund manager that consistently underperformed their benchmarks even if they were excellent in other ways, unless there was a good reason for it. 

If you're going to research past performance, why bother with an IFA, just research fund managers. It's their primary job to deliver performance against benchmarks, it's not the primary job of an IFA. If you're knowledgable enough to research past performance taking into account risk, diversity, performance in different market conditions etc then you're likely to be knowledgable enough not to need an IFA.

I do agree but how many people come on these boards and pretty much start with 'what are peoples returns over the past xxxx?' Even after all the discussion about suitability, appropriate risk levels, explanation of possible home bias underperformance it still seems that people want to see evidence of past performance. Its difficult to ignore. If someone asks, as they often do, then I would say its better to find a way of trying to explain performance and where it is and isn't important rather than ignoring it. It is what people like to talk about even if it shouldn't be.

When people post examples of low returns on an IFA run portfolio it seems people are quick to jump on the thread and criticize without knowing the full details and when there are examples of good performance then they claim luck or incorrect risk level. 

dunstonh

Has anyone actually said that? Maybe someone on my ignore list did. Bog standard global trackers have beaten VLS100, as discussed here a lot. I have. It's hardly an achievement.

VLS100 is the least effective VLS fund.  I am sure it's only there for completeness.  Although considering the large amount of money in that fund, it is clear that it appeals to some instead of a global tracker.    

I think there is one reference to VLS on this thread but there has been a trend on similar threads to talk VLS up as the option that will give the best returns and that anything else is bogus or dodgy or whatever.

However, I still quite like VLS and their home bias which they have good reason for (and was a reason for underperformance in recent years). As you say, the key is suitability, not outperformance.

We still have a lot of money put on VLS funds with transactional clients.  Although we dont use it any more as the similar alternatives meet suitability criteria slightly better (the alternatives being risk targetted rather than fixed equity/bond split).    

[Deleted User]

VLS was mentioned not to "talk it up" but as a popular middle of the road yardstick  by which to measure the lamentable performance of TP portfolios these last three years. No doubt the OP's Financial Adviser will portray TP in a different light, courtesy of the good start made by all the funds in the two years since launch. These figures help to attract the new investment True Potential have so aggressively been chasing with the help of Financial Advisers but don't help the majority of public investors who came on board after Y1/Y2
.https://www.tpllp.com/true-potential-portfolios/

zagfles

Prism said:

zagfles said:

Prism said:

zagfles said:

The job of an adviser isn't to deliver star performance, if you believe in past performance being a guide to future returns then find star fund managers, it's their job to deliver star performance against benchmarks.

Of course some people actually believe the "past performance is not a guide to future performance" you see everywhere.

Past performance is no a guarantee but its certainly a guide regardless of the legalese. I would want to see the past performance of an IFA the same as I would a fund manager. It wouldn't be my prime criteria but I wouldn't likely select an IFA or fund manager that consistently underperformed their benchmarks even if they were excellent in other ways, unless there was a good reason for it. 

If you're going to research past performance, why bother with an IFA, just research fund managers. It's their primary job to deliver performance against benchmarks, it's not the primary job of an IFA. If you're knowledgable enough to research past performance taking into account risk, diversity, performance in different market conditions etc then you're likely to be knowledgable enough not to need an IFA.

I do agree but how many people come on these boards and pretty much start with 'what are peoples returns over the past xxxx?' Even after all the discussion about suitability, appropriate risk levels, explanation of possible home bias underperformance it still seems that people want to see evidence of past performance. Its difficult to ignore. If someone asks, as they often do, then I would say its better to find a way of trying to explain performance and where it is and isn't important rather than ignoring it. It is what people like to talk about even if it shouldn't be.

When people post examples of low returns on an IFA run portfolio it seems people are quick to jump on the thread and criticize without knowing the full details and when there are examples of good performance then they claim luck or incorrect risk level. 

And vice versa. So what? Point is, if you want to chase performance, look at fund managers who's primary job it is to perform against benchmarks.

zagfles

dunstonh said:

Has anyone actually said that? Maybe someone on my ignore list did. Bog standard global trackers have beaten VLS100, as discussed here a lot. I have. It's hardly an achievement.

VLS100 is the least effective VLS fund.  I am sure it's only there for completeness.  Although considering the large amount of money in that fund, it is clear that it appeals to some instead of a global tracker.   

The point of VLS100 is that it isn't a global tracker. Those who constantly bang on about global trackers doing better and being cheaper are missing the point. It's "active" in so far as selection of the underlying passives to use.