What pension planning advice do I need?

cfw1994

dunstonh said:

Have to say I do find it odd when the generally very sound @dunstonh states "the better performance is just a nice addition" in his reply above.   
I find it somewhat.....sniffy....frothy....100% a 'sales puff', as my distant faintly legal background might have put it.   
If someone claims to be able to make you more money than any respected fund, you should probably run a mile!

It doesn't matter what I say.  Someone just seems to take offence about it.  The fact is that our model portfolios have consistently outperformed VLS, net of charges, for over 5 years.    There is this strange mentality that some people cannot believe that there are potentially better options than VLS.

And it's not just IFAs.  There are plenty of DIY investors beating VLS as well.

Future returns are unknown.  No-one knows in advance what will be best.   No-one should guarantee an option is better than another.  However, this downright refusal to accept that people can hold alternative investments to VLS and do better than VLS is very strange.

Never said I took offence..but it is just a "sales puff".  Unless you are providing a legally binding promise?

Apologies if that was your reading: my point is that if you work your IFA business by telling people you can make more money for them, I suggest you post some portfolio examples, with predictions for the coming 12 months 

Many here will have "outperformed", but my other point was that you don't necessarily need to chase that "over performance".   Of course, we all want our money to work hard for us, and ideally 'outperform' the average, but others here will have low-volatility funds precisely to avoid big drops, and accept that their growth will be 'average'.   & if markets drop, then their decline will also drop, but perhaps less than others with 'more adventurous' pots.

No disputing that fees get paid regardless of performance, I note 

dunstonh

Never said I took offence..but it is just a "sales puff".  Unless you are providing a legally binding promise?

How is it sales puff?   And why on earth would I put it as a legally binding promise?   Would you put VLS as being best as a legally binding promise?

Apologies if that was your reading: my point is that if you work your IFA business by telling people you can make more money for them, I suggest you post some portfolio examples, with predictions for the coming 12 months  

No IFA and no individual can tell what will be best and should not be making any predictions. That would be silly and inappropriate.

Many here will have "outperformed", but my other point was that you don't necessarily need to chase that "over performance".   Of course, we all want our money to work hard for us, and ideally 'outperform' the average, but others here will have low-volatility funds precisely to avoid big drops, and accept that their growth will be 'average'.   & if markets drop, then their decline will also drop, but perhaps less than others with 'more adventurous' pots.

You don't need to chase over performance.    

No disputing that fees get paid regardless of performance, I note  

Why would performance come into it?  The IFA has no influence over the performance.  The IFA just has an influence on the structure and process.

zagfles

dunstonh said:

Have to say I do find it odd when the generally very sound @dunstonh states "the better performance is just a nice addition" in his reply above.   
I find it somewhat.....sniffy....frothy....100% a 'sales puff', as my distant faintly legal background might have put it.   
If someone claims to be able to make you more money than any respected fund, you should probably run a mile!

It doesn't matter what I say.  Someone just seems to take offence about it.  The fact is that our model portfolios have consistently outperformed VLS, net of charges, for over 5 years.    There is this strange mentality that some people cannot believe that there are potentially better options than VLS.

And it's not just IFAs.  There are plenty of DIY investors beating VLS as well.

Future returns are unknown.  No-one knows in advance what will be best.   No-one should guarantee an option is better than another.  However, this downright refusal to accept that people can hold alternative investments to VLS and do better than VLS is very strange.

Except no-one ever says that. But it's a strawman you like constantly arguing against for some reason.

zagfles

cfw1994 said:

dunstonh said:

Have to say I do find it odd when the generally very sound @dunstonh states "the better performance is just a nice addition" in his reply above.   
I find it somewhat.....sniffy....frothy....100% a 'sales puff', as my distant faintly legal background might have put it.   
If someone claims to be able to make you more money than any respected fund, you should probably run a mile!

It doesn't matter what I say.  Someone just seems to take offence about it.  The fact is that our model portfolios have consistently outperformed VLS, net of charges, for over 5 years.    There is this strange mentality that some people cannot believe that there are potentially better options than VLS.

And it's not just IFAs.  There are plenty of DIY investors beating VLS as well.

Future returns are unknown.  No-one knows in advance what will be best.   No-one should guarantee an option is better than another.  However, this downright refusal to accept that people can hold alternative investments to VLS and do better than VLS is very strange.

Never said I took offence..but it is just a "sales puff".  Unless you are providing a legally binding promise?

Apologies if that was your reading: my point is that if you work your IFA business by telling people you can make more money for them, I suggest you post some portfolio examples, with predictions for the coming 12 months 

Many here will have "outperformed", but my other point was that you don't necessarily need to chase that "over performance".   Of course, we all want our money to work hard for us, and ideally 'outperform' the average, but others here will have low-volatility funds precisely to avoid big drops, and accept that their growth will be 'average'.   & if markets drop, then their decline will also drop, but perhaps less than others with 'more adventurous' pots.

No disputing that fees get paid regardless of performance, I note 

No, no you don't get it. Apparently people constantly say nothing can ever beat VLS. I've never seen any posts actually saying that, but apparently it happens all the time. Therefore he's just using the example of his "model portfolio" beating VLS as an example to prove all these imaginary people wrong. Not as "sales puff" at all. The very thought...

[Deleted User]

dunstonh said:

Have to say I do find it odd when the generally very sound @dunstonh states "the better performance is just a nice addition" in his reply above.   
I find it somewhat.....sniffy....frothy....100% a 'sales puff', as my distant faintly legal background might have put it.   
If someone claims to be able to make you more money than any respected fund, you should probably run a mile!

The fact is that our model portfolios have consistently outperformed VLS, net of charges, for over 5 years.    There is this strange mentality that some people cannot believe that there are potentially better options than VLS.

And it's not just IFAs.  There are plenty of DIY investors beating VLS 

1. This is a pensions and retirement topic as opposed to “get rich quick”.  Five years isn’t a meaningful period of time to boast about. 

2. In general, beating a benchmark is the job description of an active manager.  Not what I expect a good adviser to boast about.  An adviser’s job is to advise on issues such as asset allocation, tax efficient  planning, etc.  

3. Funny thing: best active managers over a decade tend to underperform over the next decade.  Lots of studies out there.  The number that outperforms consistently over a meaningful period of time (in the context of pension fund accumulation) is zero (discounting Bernie Medoff here).  There is a reason for this.  Different styles and factors fall in and out of favour. What works today isn’t going to work tomorrow. Most tech/growth funds “outperformed” VLS over the last decade. Anyone who concentrated on US outperformed over the last decade too.  How that style compared against broad world index during 2000-2010? Different story. 

4. No decent professional ever would boast about performance without referring to the level of risk.  Highly misleading. 

5. Retirement investing isn’t even about “beating X or Y”.    Its a long game and everyone wins who does not lose.  You don’t lose by having a strategy which defines portfolio that does not incur unsustainable losses during the next long term bear market.  

Want to tout your active investment skills using your “model portfolios” based on past performance?  Fine.  What was the composition in January 1973 and March 2000?  

dunstonh

2. In general, beating a benchmark is the job description of an active manager.  Not what I expect a good adviser to boast about.  An adviser’s job is to advise on issues such as asset allocation, tax efficient  planning, etc.  

 You seem confused.  You say its an advisers job to advise on issues such as asset allocation. But then slag off advisers that do that.

3. Funny thing: best active managers over a decade tend to underperform over the next decade.  Lots of studies out there.  The number that outperforms consistently over a meaningful period of time (in the context of pension fund accumulation) is zero (discounting Bernie Medoff here).  There is a reason for this.  Different styles and factors fall in and out of favour. What works today isn’t going to work tomorrow. Most tech/growth funds “outperformed” VLS over the last decade. Anyone who concentrated on US outperformed over the last decade too.  How that style compared against broad world index during 2000-2010? Different story. 

I agree.  Going fully active is not the answer.  Especially with an invest and forget type investor.

4. No decent professional ever would boast about performance without referring to the level of risk.  Highly misleading. 

I agree.  Good job no-one is boasting. 


5. Retirement investing isn’t even about “beating X or Y”.    Its a long game and everyone wins who does not lose.  You don’t lose by having a strategy which defines portfolio that does not incur unsustainable losses during the next long term bear market.  I agree.   

Want to tout your active investment skills using your “model portfolios” based on past performance?  Fine.  What was the composition in January 1973 and March 2000?  

They are not my model portfolios.   You tell me what VLS did in that period.

Thrugelmir

Deleted_User said:

dunstonh said:

Have to say I do find it odd when the generally very sound @dunstonh states "the better performance is just a nice addition" in his reply above.   
I find it somewhat.....sniffy....frothy....100% a 'sales puff', as my distant faintly legal background might have put it.   
If someone claims to be able to make you more money than any respected fund, you should probably run a mile!

The fact is that our model portfolios have consistently outperformed VLS, net of charges, for over 5 years.    There is this strange mentality that some people cannot believe that there are potentially better options than VLS.

And it's not just IFAs.  There are plenty of DIY investors beating VLS 

1. This is a pensions and retirement topic as opposed to “get rich quick”.  Five years isn’t a meaningful period of time to boast about. 

That's about the length of time that Vanguard have had a UK presence. A depreciating £ and a record bull market have influenced investors perceptions. Easy to make money in the good times. It's the challenging times that stress test the model portfolios (and investors patience). As they'll be serially outperformed . 

EdSwippet

Thrugelmir said:

Deleted_User said:

...

1. This is a pensions and retirement topic as opposed to “get rich quick”.  Five years isn’t a meaningful period of time to boast about. 

That's about the length of time that Vanguard have had a UK presence. ...

Vanguard began operating in the UK over 11 years ago.

[Deleted User]

1976 in the US - first index fund.   Indices VLS (or Blackrock/HSBC versions) are based on go back even further. 

LV_426

Well it's been a great discussion and thank you all for the input.
I think, having been all round the houses with this one, that I'm tempted to bring 3 of my former pension pots into my current employer's pension scheme. This will simplify my portfolio, and my aim is to leave this particular pot for 10 years, by which time it'll have enough to supplement my DB pension and state pension.
Plus, if I'm right in thinking that drawdown pensions can be passed on to your dependents, that'll be nice for my kids to benefit from.