Pension Funds and De-Risking

dunstonh

Steve_s1 said:

dunstonh said:

Steve_s1 said:

“ Call centre workers are not trained or qualified to answer that sort of question.”…so it seems. I wonder why they give out the call centre phone number when they send the correspondence. When I have more time I’ll search their website and see what I can find out. Seems to be a conspiracy to make people pay for a financial adviser!

Because most call centre calls are basic information requests only or problems. e.g. fund value, death notifications etc.

If you want financial advice then you need a financial adviser.  Call centre workers do not have the training or regulatory permissions to give financial advice and meet the regulatory conditions.

There is no conspiracy.  If you want a job done, then you use the right person for that job.  Trying to use the wrong person will give you a suboptimal outcome.

I am not seeking or expecting financial advice from Scottish Widows. I only want to speak to someone to help me understand how their products work. 

They can explain how their product works but you are talking about the investment funds and that is more specialist.   
And you need to be realistic.   If you want a bunch of unqualified, low knowledge people on short term rolling contracts to explain the economics of investment funds then go to the pub and ask your mates.  

Albermarle

Steve_s1 said:

Albermarle said:

Normally of course a pension provider will not switch around your investments unless you instruct them to do so.

Unless you are in a Lifestyle plan . Originally these were mainly for people buying annuities and in the last 12 months they were nearly all in cash or cash like investments. There are nowadays lifestyle drawdown plans that still derisk but not to the same extent. All these type of plans use the retirement age that you have given to them as the reference.

As a result, they immediately moved 20% (£80k) of my portfolio from (moderate risk) global equities / index tracking funds to a (low risk) bonds fund, and the remaining 80% to a (low - moderate risk) index tracking fund.

This is a bit confusing. Most people would consider global equities/index trackers as high risk . 

I’ve been playing a bit with individual company stocks, so consider index trackers not to be “high risk”. Not sure if there’s a common definition of risk?

Within the investment industry , investments seem to be classed on a scale of either 1 to 7 or 1 to 10 . For sure it is not an exact science but on a scale of 1 to 10 then I guess 1 is cash and 10 is Bitcoin or Brazilian mining shares or similar .
Individual mainstream shares might be 8 and index trackers 7 ? 
On a scale of 1 to 7 , equity trackers come up as 6 usually . They could drop 40% in a crash so to the man in the street that is pretty high risk. 

Thrugelmir

Albermarle said:

dunstonh said:

Steve_s1 said:

“ Call centre workers are not trained or qualified to answer that sort of question.”…so it seems. I wonder why they give out the call centre phone number when they send the correspondence. When I have more time I’ll search their website and see what I can find out. Seems to be a conspiracy to make people pay for a financial adviser!

Because most call centre calls are basic information requests only or problems. e.g. fund value, death notifications etc.

If you want financial advice then you need a financial adviser.  Call centre workers do not have the training or regulatory permissions to give financial advice and meet the regulatory conditions.

There is no conspiracy.  If you want a job done, then you use the right person for that job.  Trying to use the wrong person will give you a suboptimal outcome.

Although clearly they can not say whether a product is suitable for you or not, I would have thought they should be able to explain how their own products worked . Lack of decent training I presume .

The product literature should be perfectly adequate. If comprehension skills struggle with same. Then I'd question if the self management of investments should be undertaken at all. 

Steve_s1

“ The product literature should be perfectly adequate. If comprehension skills struggle with same. Then I'd question if the self management of investments should be undertaken at all. ”
….I’m simply seeking to find out how the SW products work and then make a decision on their suitability. Having read the product literature it seems the default by retirement is for a large proportion to be invested in bonds, which I am questioning. My comprehension skills are fine.

EdSwippet

Thrugelmir said:

Albermarle said:

dunstonh said:

Steve_s1 said:

“ Call centre workers are not trained or qualified to answer that sort of question.”…so it seems. I wonder why they give out the call centre phone number when they send the correspondence. When I have more time I’ll search their website and see what I can find out. Seems to be a conspiracy to make people pay for a financial adviser!

Because most call centre calls are basic information requests only or problems. e.g. fund value, death notifications etc.

If you want financial advice then you need a financial adviser.  Call centre workers do not have the training or regulatory permissions to give financial advice and meet the regulatory conditions.

There is no conspiracy.  If you want a job done, then you use the right person for that job.  Trying to use the wrong person will give you a suboptimal outcome.

Although clearly they can not say whether a product is suitable for you or not, I would have thought they should be able to explain how their own products worked . Lack of decent training I presume .

The product literature should be perfectly adequate. If comprehension skills struggle with same. Then I'd question if the self management of investments should be undertaken at all. 

Certainly. The product literature could not possibly be incomplete or ambiguous. Personally I have never seen any financial product literature that wasn't crystal clear, thorough, and otherwise entirely perfect in every respect.

Steve_s1

“ Personally I have never seen any financial product literature that wasn't crystal clear, thorough, and otherwise entirely perfect in every respect.”

…..ROFL!

EdSwippet

Steve_s1 said:

“ Personally I have never seen any financial product literature that wasn't crystal clear, thorough, and otherwise entirely perfect in every respect.”

…..ROFL!

Yup. Even by the standards of our resident grouch the post I quoted was a particularly mean-spirited and entirely unnecessary comment. I'd suggest mostly just ignoring him.

Steve_s1

Thanks. I did have a less polite response that I almost sent. Your comment made me smile.

Albermarle

To go back to your original question , there is no need to be in a lifestyle product or 'balanced flexi access product' at all .
You can just construct your own portfolio or to keep it very simple just buy a multi asset fund with the desired level of equities and bonds. Then change it ( or not ) when you want to . 

With the Balanced flexi-access option you've selected at 5 years before your nominated retirement your fund will be - 30% overseas shares, 10% UK shares & 60% bonds. In the last 5 years they'll steadily shift your fund to end up as 22.5% overseas shares, 7.5% UK shares, 45% Bonds & 25% cash on the day you retire.

For sure this option does look rather too cautious and  quite heavy on bonds, especially when the outlook for bonds is not great .

Steve_s1

Thanks. Things are becoming clearer now.