Pension Pot (Company) Comparison

SandLake

7 years ago when I was 55 I was made redundant and I decided at that point to retire, initially semi-retirement but that quickly became full retirement.

Financially I am fine.

I have 3 pensions seperatly invested via a Financial Advisor (carefully not using the word Independant!), they all came from different sources.

My risk profile has been assessed.

2 of the pension pots are invested in Company A and 1 in Company B (My advisors employer) and there is approx £170K invested with each company.

I have seen the investments go significantly down and up over the last 2-3 years due to Covid and while they did get back to where they started there has now been no growth I assume due to ongoing market unrest.

My question is about comparing market performance. When my advisor changed company he wanted me to move all investments to his new employer but I put my foot down as I thought my investments were performing very well as they were and we agreed to only transfer 1 investment. The good (or bad) thing is that now I can compare the performance of the 2 companies. In the last 6 months Company A has grown by 0.5% but Company B has fallen by 3.5%. These figures are based on the daily Investment values so after all charges and fees have been taken.

While I can compare the performance of these 2 companies, it is still in a limited timeframe but I will be asking for an expanation at my next review - it would be nice to see how these 2 companies are performing against the whole of the market. I feel I am reasonably clued up on pension matters but I am still a layman and can easily get lost in confusing jargon.

Is there anyway to see, for example, if I invested £100K on 1st January, what is it worth on 30th June or 31st December in a range of investments?

LHW99

People here will tell you that its not the pension that performs as such - its what;'s inside it.

When you say "Company A" "Company B" I presume you don't mean you have two pensions where they are each invested totally in the shares of one company? Even for a non-independent advisor I think that would be regarded as a poor / bad set up.

If you can say what is actually in the pensions perople will probably be able to say more.

You could for example have only US funds in one scheme but a multi-asset fund that invests across the world in the other.

Albermarle

Is there anyway to see, for example, if I invested £100K on 1st January, what is it worth on 30th June or 31st December in a range of investments?

The problem is that there literally thousands of investment possibilities.

The problem of looking at a short time frame is that it does give a very good picture.

For example there are some well known high risk/high growth funds that are mainly invested in the tech sector ( Tesla, Apple etc ) . They saw phenomenal growth , some were 200% up in 24 months . However in 2022 they are down 50% from that high.

On the other side some funds will have had a much less dramatic journey, with reasonably steady returns going back 20 years and longer .

Very roughly the typical pension fund is down around 8 to12 % this year and probably about the same level as 12 months ago, maybe a couple of percent down.

Funds that are only down between 0 and 3 % in the last 6 months must be both quite similar and both pretty cautiously invested.

dunstonh

My question is about comparing market performance. When my advisor changed company he wanted me to move all investments to his new employer but I put my foot down as I thought my investments were performing very well as they were and we agreed to only transfer 1 investment. The good (or bad) thing is that now I can compare the performance of the 2 companies. In the last 6 months Company A has grown by 0.5% but Company B has fallen by 3.5%. These figures are based on the daily Investment values so after all charges and fees have been taken.

Sales reps will always want you on the plans of the new company as that is how they earn their money.   As they are not independent, they can't continue to use the old plans or earn from them.

When making comparisons, you have to remember potentially different risk levels and investment strategies.  Every strategy will have a short term period when it is best or worst.  So, you shouldn't look at short term.  If there are monthly contributions going into one and not the other then that can make a big difference too.

xylophone

2 of the pension pots are invested in Company A and 1 in Company B (My advisors employer) and there is approx £170K invested with each company.

What exactly does this mean?

Surely not that he has two thirds of his pension in the shares of (for example) GSK and the other third in (for example) Lloyds Bank, the FA's employer?

DaveO

xylophone said:

2 of the pension pots are invested in Company A and 1 in Company B (My advisors employer) and there is approx £170K invested with each company.

What exactly does this mean?

Surely not that he has two thirds of his pension in the shares of (for example) GSK and the other third in (for example) Lloyds Bank, the FA's employer?

I took it to mean these companies are pension providers and the pension pot was invested in a pension product from each company.  So as company B employs FA’s and not IFA’s that could be a company like Vanguard who have advisors who only advise on Vanguard products as an example.

SandLake

Thank you for the replies, they have made me realise that I really need to think before I speak (or ask a question), all your responses were available to me but I didn't think them through, I apologise for my naivety and thank you for my re-education.

Company A is Royal London and the investment is in Governed Portfolio 5, Company B is another company that has Balanced Portfolio's. I make no contributions to either.

Secret2ndAccount

If you go to trustnet.com you can get some information about what is inside your funds, and their performance over the long term. You can also compare with thousands of other funds. Your Royal London fund is quite a mix, encompassing shares, bonds, property and cash, and spanning much of the globe. Not a bad thing for a pension fund.
It looks like your fund is about 60% equities, so I plotted it against a popular choice on this forum, Vanguard VLS60.



Over 10 years, both funds have doubled your money, and are within 3% of each other. The Vanguard fund has been ahead for much of the time, but is performing badly of late. I notice that the annual charge is substantially lower for VLS60 0.22% vs 1% for your fund. It's possible your company gets a discount on the fund charge. This difference in charges would account for more than the difference in performance. If Vanguard charged 1%, your blue line would be well ahead.

SandLake

That's fantastic, looks as if I will be busy tomorrow!

Thanks very much

dunstonh

It should be noted that the graph shows the default GP from RL.   The equity content can be replaced with a global tracker and you typically find that has provided a much better outcome.  RL has been very good with their defensive assets during the last 6 months.  They were not so good during the coronavirus period.