Where to compare pension performance

new666uk

Hi,

I have an Aviva Pension Portfolio (pre-retirement) through an advisor. We have regular meetings and I am shown the fund performance measured against others in the market and generally it holds it's own. I'm not convinced that the advisor is really adding value to my pension, rather the opposite considering the fee's.I just don't see what they actually do other than our meetings.

Because of this I'm trying to find where I can compare my Aviva pension against the market with a view that I'll drop the IFA and monitor the performance myself. From a bit of digging it seems a closed world - only advisors have access to this magical information. Is that true or have I just not searched hard enough?

thanks

dunstonh

Where to compare pension performance

pensions do not perform.  The investments within the pension perform.   Aviva Pension Portfolio is the name of their pension via their whole of market platform.  So, you have over 30,000 investments available.

From a bit of digging it seems a closed world - only advisors have access to this magical information.
Is that true or have I just not searched hard enough?

Not at all.   You have Trustnet and Morningstar for example which offer cut down versions of their full retail software at no cost.

.I just don't see what they actually do other than our meetings.

Ongoing services vary.  Typically, where the adviser is selecting advisers on a discretionary basis, they have absolutely nothing to do with the investments.  Whereas on an advisory basis, the adviser selects the investments and carries out ongoing due diligence on them, rebalancing etc.    Advisory is usually cheaper but wealth management firms tend to prefer discretionary.

NannaH

It’s very easy to set up your portfolio on Trustnet and you have access to all sorts of comparison charts etc.   This is one from the good old days 🤣 i.e.  last year. 

NannaH

NB: you can add an index to the chart as well to track against. 

new666uk

Thanks @NannaH appreciate your clarifying that.

I did look at trustnet this morning and now realise my error. The Aviva pension invests in Aviva Insured Funds  Mixed Investment 40-85% which I see there now I stop being silly.

Regarding discretionary vs. advisory, the client agreement doesn't state one or the other but from the behaviour (we've not been shifted to other investments I'm thinking it's advisory.

I'll play with trustnet later to see how the aviva fund compares. It's massively frustrating that through no fault of my own the pension value forecast has more than halved from before the banking crisis in 2008 and the whole finance world seemed to shrug it's shoulders and just move on largely as before.

Albermarle

The problem is that you have to 
1) Compare apples with apples . If you compare a higher risk growth orientated fund with a lower risk fund , you will get different results . That is not to say one is doing better than the other as they both have different objectives.
2) Define what you mean by performance . That in a rising market it grows very quick or in a dropping market it does not drop so quick? or something inbetween ?

Because of this I'm trying to find where I can compare my Aviva pension against the market with a view that I'll drop the IFA and monitor the performance myself.
Many posters on this forum do not use financial advisors and seemingly successfully in most cases . However it clearly helps if you have some knowledge about investments , pension tax rules and later how best to take the income from the pension.
So probably better to do some  background reading before changing any arrangements . Reading this forum regularly can also help.

dunstonh

I did look at trustnet this morning and now realise my error. The Aviva pension invests in Aviva Insured Funds  Mixed Investment 40-85% which I see there now I stop being silly.

That is a low cost multi-asset fund.  Typically used for those investors that are cost focused rather than returns focused.

Regarding discretionary vs. advisory, the client agreement doesn't state one or the other but from the behaviour (we've not been shifted to other investments I'm thinking it's advisory.

Discretionary wouldn't use that fund.  Discretionary is not cost focused.

 It's massively frustrating that through no fault of my own the pension value forecast has more than halved from before the banking crisis in 2008 and the whole finance world seemed to shrug it's shoulders and just move on largely as before.

You dont receive forecasts.   Forecasts are something that is expected to happen.  What you receive are projections.  Projections are synthetic calculations using a range of assumptions that may have little or nothing to do with the investments you hold.   For example, the projection rates would be the same whether you held the best fund in a sector or the worst fund.

Changes since 2008 include the move from monetary growth projection to SMPI projections. i.e. the ones back then showed the money in future spending terms whereas today they show them in today's spending terms.   The FCA also mandated a reduction in all of the growth rates which can include a negative as the low rate and a break even at the mid rate.   The projections also assume you will buy one of the most expensive annuities going.  Despite hardly anyone ever buying it.    

Projections have gone from being optimistic to pessimistic.   Mainly to encourage people to pay more into pensions rather than rely on investment returns.   However, it seems very many people dont read the assumptions used on the projections and think they are a forecast.

And to be honest, if you are going to try and analyse investments, you need to drop the guesswork.  i.e. the reference to the banking crisis has no direct relevance to the FCA changing the way projections work.       

Your projections may have halved but in the real world what you have today would be higher at this point than what was projected in 2008.

Albermarle

It's massively frustrating that through no fault of my own the pension value forecast has more than halved from before the banking crisis in 2008 and the whole finance world seemed to shrug it's shoulders and just move on largely as before.

To add to comments above . It is a very rough rule of thumb but look at the projected pot sizes and you should be able to take 4% pa safely from them as a pension income . I assume that will give a higher income than the figure in the projection, which is based on an expensive annuity 

Thrugelmir

Investing using hindsight is never advisable. There'll always be a better performing investment elsewhere. 

new666uk

@dunstonh

Aviva product feedback appreciated, thanks

Projection / forecast may be an incorrect choice of words but in either eventuality they are intended to be guides to the future, neither of which are guaranteed so lets just chalk that up to semantics.

Noted the calculation changed many years ago to be clearer and more meaningful. The anticipated/projected/forecast/read-in-the-runes final value of the pension pot at retirement is massively different which either suggests that the old calculation used was flawed or the returns have been far below expectations.

@Albermarle

Yes, I know I need to do as close to apples to apples as I can. I wasn't expecting to see the Aviva fund perform at the top of the league by virtue of its conservatism. My thought was to identify similar funds and track them alongside so I can see if the Aviva one is relatively well performing. Possibly adding in something with a higher risk profile to see the delta between slow and steady and rolling the dice. I'm considering medium to long term performance over short term win/loss so my comparison window would be say 5 years trend.

dunstonh

Noted the calculation changed many years ago to be clearer and more meaningful. The anticipated/projected/forecast/read-in-the-runes final value of the pension pot at retirement is massively different which either suggests that the old calculation used was flawed or the returns have been far below expectations.

Many would argue that they are less clear and less meaningful.   On the pensions section of this site, you frequently see this subject come up and the lack of understanding of the assumptions used is commonplace.

The old calculations were flawed.  The new current calculations are flawed.  There is no perfect calculation.    However, I prefer the methodology of the old calculations but would add the impact of inflation as a secondary figure.        Advisers are fortunate that they are not bound by the one-size-fits-all methodology but can personalise them to suit what the individual is doing. i.e. level annuity vs RPI annuity vs flex-access drawdown vs phased drawdown etc.

It doesn't matter what method you use if the person doesn't understand the assumptions that are used in the calculation and then jumps to incorrect conclusions.

Returns have been above expectation for the last 14 years.

'm considering medium to long term performance over short term win/loss so my comparison window would be say 5 years trend.

5 years is short term.   An economic cycle is around 10-15 years nowadays.  Medium term is around 8-15 years and long term is around 15+.     A 5 year period will not indicate a trend.  Nor will a 10 year period.

Do you get the 5 year period of gains or the 5 year period of losses? Do you get the 5 year period when exchange rates work against you or for you?

Do you get a period where you get the perfection of markets and exchange rates going in your favour or the perfect storm of going against you?

I wasn't expecting to see the Aviva fund perform at the top of the league by virtue of its conservatism.

It is not a conservative fund.  And it will never be top but it will never be bottom.  It is not designed to be that sort of fund.