Workplace vs own pension

Deedoodee

I have a workplace pension (contributions from me matched by employer) and a separate pension which was set up during my self-employed days. Only opened it for year or so before deciding to go salaried. This pension was set up and managed by a financial advisory company because I know very little about pensions/ investments and dint have time to learn or keep up to date with moving my money. 

I had a bad year last year in terms of personal problems (multiple bereavements) and have only just signed into the private account and noticed that it’s made a 13% loss in the pass year. My work place pension since last year has doubled. 

 I didn’t have a 2021 review. I’m not sure why. Last year is a bit of a blur so it is possible they contacted me for an appointment and I didn’t see it or follow up. I’ve contacted them now and booked a meeting. It doesn’t look like there’s been any movement on the account since 2020 (my last review, I was unhappy with the ethics of some of the investments so they were removed). Is this a failure of the company who was supposed to be managing my account? I understand investments can change but a 13% drop with no action seem iffy to me.

Are there people I can contact to review the company I’ve employed to see if they’ve acted inadequately? Should I move all my pensions into just the work one? 

Thanks

Albermarle

A 13% loss is quite possible, as after years of good growth in the financial markets , there has been a correction .
Can you confirm the actual date range involved ? A loss of 13% during 2021 would be unusually bad , whilst a loss of 13% so far this year would be not unusual .
On the other hand it would be a miracle if your workplace pension had doubled ! Again can you confirm the exact time period involved and that you have subtracted your ongoing contributions during the period (to give a fair comparison ) 
Good to be clear on the facts as a starting point.

 I understand investments can change but a 13% drop with no action seem iffy to me.
Often doing nothing is the best policy , whatever you do you can't buck the markets .

Regarding the IFA/personal pension , can you indicate how large the funds are and how much you are paying the IFA.
It might well be better to just transfer everything into your workplace pension but it is not possible to say without more details .

Are there people I can contact to review the company I’ve employed to see if they’ve acted inadequately?
Almost certainly this would be waste of time and money .Nothing you have said has indicated any malpractice or anything like that .

grumiofoundation

The performance of the pensions is not determined by whether they are workplace/personal but by what they are invested in.

As above are you certain you have the numbers correct and that you are comparing like for like when considering investment returns? For example with the workplace pension are you just comparing to what you have paid in and therefore counting the employer contribution as investment returns. 

gm0

No simple answer possible.  Selling up could crystallise a temporary loss (volatility).  And transfer in cash requires sellling up. Occupational schemes often don't let random investments in rather than via cash.

Check data carefully.  Contributions may be dominating apparent better performance on the workplace pension.  Double vs -13% is odd and likely not accurate for one of a range of reasons.  Remove these carefully before comparing investment performance, impact of contributions, line up start end dates, does the performance broadly match what markets, indexers or similar fund mixes are doing in the same year etc.

Whether a 13% loss is reasonable behaviour for what you are invested in depends entirely on what that is.  And whether that investment choice was suitable for you and documented properly by the adviser is the only basis for complaint - the outcome is not underwritten.

If you were - very cautious and risk averse during the advice fact find then you may have been put into a "suitable for you" - low equites, high bonds investment mix precisely to reduce volatility - short term losses albeit at the cost of long term growth potential.  Most pension platforms have fund ranges with risk tiers from cautious to very aggressive and you will have been matched to one of these.

If so - then in a dip like March 2020 such a low equities fund would halve the drop seen.  But in a year like the most recent one where equities went sideways and bonds have been shedding value (interest rates turning up) - the bond heavy fund loses 5% and the richer in equities one loses 0.5%.  During the pandemic panic the bond heavy one temporarily lost only 10% and the equity rich one temporarily lost 22%.  Very short term conditions and short term performance data - even if accurately compared don't tell you much about the long term performance or goal.  Reporting dates start/end for % make a big difference.

All this assumes your adviser put you on mainstream platforms and UK investments and is legitimate and not a scammer as it seems unlikely from your post that the adviser should have been doing anything more exotic.

Deedoodee

Thanks all. These are all good points I had overlooked. I think I’m used to fairly consistent (better) growth in the personal one and reacted without properly looking. I pay the same amount into both but, in my panic, forgot to account for the employers contribution. I will have a look at this more carefully this evening, including accounting for pot size, and report back.

Deedoodee

gm0 said:

All this assumes your adviser put you on mainstream platforms and UK investments and is legitimate and not a scammer as it seems unlikely from your post that the adviser should have been doing anything more exotic.

The seem legitimate but how would I know? The platform I’m on is Novia. 

Albermarle

Deedoodee said:

gm0 said:

All this assumes your adviser put you on mainstream platforms and UK investments and is legitimate and not a scammer as it seems unlikely from your post that the adviser should have been doing anything more exotic.

The seem legitimate but how would I know? The platform I’m on is Novia. 

The danger signs are an obscure platform and exotic type investments , like in Bolivian rainforests or Truffle trees.

Novia is a well known platform that financial advisors use. 

Marcon

Deedoodee said:

 I didn’t have a 2021 review. I’m not sure why. Last year is a bit of a blur so it is possible they contacted me for an appointment and I didn’t see it or follow up. I’ve contacted them now and booked a meeting. It doesn’t look like there’s been any movement on the account since 2020 (my last review, I was unhappy with the ethics of some of the investments so they were removed). Is this a failure of the company who was supposed to be managing my account? I understand investments can change but a 13% drop with no action seem iffy to me.

Are there people I can contact to review the company I’ve employed to see if they’ve acted inadequately? 

You admit they may have tried to contact you, so it seems a bit unfair to blame them for your lack of response. A 13% drop is not out of the way, depending on where the funds are invested - and some 'ethical' funds can be particularly volatile/show poor returns. You've already said that was what you wanted in your 2020 review, so again not fair to blame the company. If your pension was only open for a year before you became salaried, there's not going to a huge amount in it, so the actual loss is surely quite modest, which in turn means you don't need to take any urgent action.

Deedoodee

Marcon said

You admit they may have tried to contact you, so it seems a bit unfair to blame them for your lack of response.

I work in private healthcare, where insurance and unions frequently tell us that ignoring advice still falls back onto the professional, not the patient, so that’s probably spilling over. 

Marcon said:

 A 13% drop is not out of the way, depending on where the funds are invested - and some 'ethical' funds can be particularly volatile/show poor returns. You've already said that was what you wanted in your 2020 review, so again not fair to blame the company.

Should that have been explained to me at the time? Not that it would necessarily change my decision but it would be part of expectation management/ informed decision.

Just trying to work out what is ‘normal’.

dunstonh

 I didn’t have a 2021 review. I’m not sure why. Last year is a bit of a blur so it is possible they contacted me for an appointment and I didn’t see it or follow up

They would almost certainly contacted you. Advisers have to be proactive.  However, if you say "not now" or put them off then that is your choice and they have to accept that.

It doesn’t look like there’s been any movement on the account since 2020 (my last review, I was unhappy with the ethics of some of the investments so they were removed). Is this a failure of the company who was supposed to be managing my account? I understand investments can change but a 13% drop with no action seem iffy to me.

The majority of advisers run on an advisory basis.    Not a discretionary basis.   What that means is that they cannot take any action without your permission.  So, you wouldn't see any changes as you haven't had the meeting to give your permission for any changes they may want to make.

A 13% drop is not iffy and it's in line with expectation given current events/issues.    No adviser could have avoided that.    And 13% is not a particularly large drop.   During the coronavirus, markets fell 35%.  During the credit crunch it was 45%.  In 2000-2002 markets fell around 45% with three negative years in a row.  Tech stocks fell 90% from peak back then as well (and tech stocks are behind a lot of the falls this time).

Advisers cannot avoid market falls in the same way advisers are not responsible for the gains.

Are there people I can contact to review the company I’ve employed to see if they’ve acted inadequately? 

They haven't acted inadequately.      Are your advisers responsible for Russia invading Ukraine?  Are they responsible for the cost of living crisis?  Are they responsible for Coronavirus and the impact on supply?  No.   

Should that have been explained to me at the time? Not that it would necessarily change my decision but it would be part of expectation management/ informed decision.

Yes.  And pretty much everything issued around the advice would say that your money will go down as well as up.

Your post also indicates you have invested for a number of years.  So, when it went down by more in 2020 what did you do?  Why are you now more concerned it has gone down by a smaller amount when it went down more in 2020?   or 2018 or 2015/16? (all periods that went down by more).

I work in private healthcare, where insurance and unions frequently tell us that ignoring advice still falls back onto the professional, not the patient, so that’s probably spilling over. 

In any other profession, ignoring the advice of the professional is the prerogative of the consumer and the professional is not responsible.  They can only advise.  They cannot force a consumer to do something.   

Thrugelmir

Deedoodee said:

It doesn’t look like there’s been any movement on the account since 2020 (my last review, I was unhappy with the ethics of some of the investments so they were removed). 

If you give specific instructions then you have to accept the consequences of the action.