Financial advisor value vs cost

IamWood

> In 2013, I had an independent advisor review my private pension plan. It had a transfer value of £50k.

> By 2020, the fund valuation was £71k. I get a basic valuation report every year, no changes have been made to the plan or fund allocation.

I must say the advice on your investment is rather poor. My dead pension with Aegon under default option has since doubled.

OldMusicGuy

Linton said:

If the OP goes to Vanguard and picks a VLS fund she needs to decide which one of the 5.  If you look at the average annual returns over the past 5 years the difference between adjacent VLS funds is very close to 2%/year.  So twice as much money is at stake compared with deciding whether to DiY or not with even a very simple investment.  However people on this forum seem to regard choosing a VLS as of marginal significance.

Which is all the financial advisor is doing (picking a few funds based on a risk profile). They could make exactly the same "mistake". Your assumption that an advisor always gets it "right" compared to a DIYer like me is flawed. But they will still charge their percentage off the top regardless of how well/badly they do.

As the IFAs on here keep telling us, IFAs are not investment managers.

[Deleted User]

Linton said:

From the username I assume the OP is female...

Whether to pay a 1% advisor charge is a big decision, but deciding to DiY implies much more siginificant decisions....

If the OP goes to Vanguard and picks a VLS fund she needs to decide which one of the 5.  If you look at the average annual returns over the past 5 years the difference between adjacent VLS funds is very close to 2%/year.  So twice as much money is at stake compared with deciding whether to DiY or not with even a very simple investment.  However people on this forum seem to regard choosing a VLS as of marginal significance.

If the OP is happy and feels able to do the appropriate research and make such decisions she should DiY. If not, looking at those figures choosing to stay with the current advisor is not foolish though  it could be worthwhile looking at other local IFAs to see if there is someone cheaper.

I think that post suggests a degree of difficulty that the Vanguard range does not present to the individual investor. VL20 is the most cautious option, VL60 mid-range, VL100 max range of outcome. If none of those make you feel comfortable, they have VL40 and VL80.
So, last eight years in VL60 has given its investors 85% appreciation, last eight years in VL20 43%. These are by no means blow out returns but it does mean that, by investing in VL20, the OP would have a bigger pension fund today, even without the monthly contributions.

There again, simply sacking the (I)FA and leaving the investment where it is looks a better option than retaining him.

Albermarle

My dead pension with Aegon under default option has since doubled.

If it has grown so much then it is clearly not dead !

Croeso69

Albermarle said:

My dead pension with Aegon under default option has since doubled.

If it has grown so much then it is clearly not dead !

It was probably just resting.

IamWood

Croeso69 said:

Albermarle said:

My dead pension with Aegon under default option has since doubled.

If it has grown so much then it is clearly not dead !

It was probably just resting.

I left the job many years ago. I instructed my former employer to put my reduant money there before setting foot in a foreign land. Haven't checked it before recently .