Pensionbee decimates my pension pot.

[Deleted User]

bostonerimus said:

Deleted_User said:

1. Its not in the interest of any consumer to pay ongoing fees to advisors. 

2. Some truth to not knowing own circumstances, risk tolerance, etc.  its not as easy as it seems,  Still, if consumers don’t know themselves then they are unlikely to tell it to you.  In fact, research shows that the ones who do know still vary in what they communicate in responses to questions, depending on the day, weather and latests news.  Figuring it out requires education and effort and is best done by an individual. 

3.  I am sorry but the likes of John Bogle, Burton Malkiel, Bernstein, Edwards, Tony Levene are far better qualified to understand markets than an average advisor.  Their work is peer reviewed and is recognized.  And readily available. What are your credentials in statistical analysis - for starters?  

I'm with you in not believing that ongoing financial advice is necessary for most people. There might well be critical times when some people will need and want it, like to sort out drawdown, but a well designed portfolio should not need much maintenance at all. However, some people like to have the psychological crutch of an advisor and if it stops them from doing dumb things then that's good, and the truly disengaged will probably benefit from ongoing advice. The thing to avoid is believing that having an IFA will help you "beat the market" or avoid losses in bear markets. You will have to pay big fees for a money manager to actively manage your portfolio, but IMO that's just doubling down on the problem: higher fees with no guarantee of a successful outcome. Bottomline is that I'm "cheap" and if I can save a few pounds I will so DIY is how I do it. It's not for everyone and people will spend their money as they see fit so I'm sure there will always be plenty of willing clients for financial advisors. In the case of the OP some financial advice would have been useful if only to help their expectations match up with reality.

Yes, for the OP paying for the advice would have been better than buying funds without having any idea what he bought. I don’t get why anyone would do that. Then again, if he doesn’t have much to start with then most advisors wouldn’t have been interested - and starting is exactly when people need information.  

We are lucky today compared to the investors from 20, 30, 50 years ago - information is readily available and investing is SO much cheaper.  Yet many folks just throw away the advantages and then complain. I think attention spans and basic laziness are to blame. There is also an element of human psychology: they want to look a well dressed man in the eyes and have him hold their hand. 

[Deleted User]

LV_426 said:

Deleted_User said:

LV_426 said:

Deleted_User said:

- Thirdly, you can easily get guidance from people who are far better qualified than an average advisor and it would cost you far, far less.

Can you please enlighten me? Who are these people who can give me solid financial advice at minimal cost?

John Edwards “DIY retirement” is a good and “easy reading” start.  I really like “Random Walk”.  Good list of highly reputable sources: https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investing_start-up_kit_for_non-US_investors

Well books are fine. But a book about pensions can only ever be written in a general manner. That's a far cry from someone gathering information about your funds, and making recommendations.

You appear to have a dismissive and quite insulting view of financial advisers. I won't be engaging with you further on the subject.

I answered the question you asked me on reputable sources of information.  “Thank you” would have worked. 

bostonerimus

Deleted_User said:

bostonerimus said:

Deleted_User said:

1. Its not in the interest of any consumer to pay ongoing fees to advisors. 

2. Some truth to not knowing own circumstances, risk tolerance, etc.  its not as easy as it seems,  Still, if consumers don’t know themselves then they are unlikely to tell it to you.  In fact, research shows that the ones who do know still vary in what they communicate in responses to questions, depending on the day, weather and latests news.  Figuring it out requires education and effort and is best done by an individual. 

3.  I am sorry but the likes of John Bogle, Burton Malkiel, Bernstein, Edwards, Tony Levene are far better qualified to understand markets than an average advisor.  Their work is peer reviewed and is recognized.  And readily available. What are your credentials in statistical analysis - for starters?  

I'm with you in not believing that ongoing financial advice is necessary for most people. There might well be critical times when some people will need and want it, like to sort out drawdown, but a well designed portfolio should not need much maintenance at all. However, some people like to have the psychological crutch of an advisor and if it stops them from doing dumb things then that's good, and the truly disengaged will probably benefit from ongoing advice. The thing to avoid is believing that having an IFA will help you "beat the market" or avoid losses in bear markets. You will have to pay big fees for a money manager to actively manage your portfolio, but IMO that's just doubling down on the problem: higher fees with no guarantee of a successful outcome. Bottomline is that I'm "cheap" and if I can save a few pounds I will so DIY is how I do it. It's not for everyone and people will spend their money as they see fit so I'm sure there will always be plenty of willing clients for financial advisors. In the case of the OP some financial advice would have been useful if only to help their expectations match up with reality.

Yes, for the OP paying for the advice would have been better than buying funds without having any idea what he bought. I don’t get why anyone would do that. Then again, if he doesn’t have much to start with then most advisors wouldn’t have been interested - and starting is exactly when people need information.  

We are lucky today compared to the investors from 20, 30, 50 years ago - information is readily available and investing is SO much cheaper.  Yet many folks just throw away the advantages and then complain. I think attention spans and basic laziness are to blame. There is also an element of human psychology: they want to look a well dressed man in the eyes and have him hold their hand. 

I started investing in the US just over 30 years ago and was lucky that I had access to some reasonable index tracker funds in my pension plan, although I didn't use them for my initial pension contributions instead buying a deferred annuity which has turned out to be a very steady performer as part of my fixed income allocation. When I moved jobs after 3 years the new pension plan used  Vanguard and Fidelity funds and that's when I did some reading and thinking about long term asset allocation.

MarkCarnage

First catch up on this forum for a bit, and to be honest quite depressing reading this....the lack of understanding of how pension providers and markets work mainly. That's an indictment of the poor financial education in the UK, and to be honest some people's desire not to learn. 

However, what's also coming through is that as I thought a year or so ago, the role of bonds in portfolio construction has been under scrutiny; the 60:40 fund mix has not helped at all, and indeed gilts and corporate bonds have fared no better than and indeed worse than many equity stocks, indices and funds. Not surprising given the base they were coming from, but the 'received wisdom' of lack of correlation and diversifying benefits has been shown to be found wanting. Index linked bonds are slightly different.....inflation protection has still been there but has been overshadowed by the sharp rise in real yields from a very low base. Still negative in the UK though.....

However, and as at least one poster has already noted, annuities are beginning to re price to more attractive levels. Worst thing that the OP and many others could do is keep shifting their pension pots somewhere else in reaction to each and every decline over the years, thereby creating a vicious spiral of loss crystallisation. 

Kim1965

Lets hope annuities come back as a viable choice. Im sure the simplicity of an annuity would appeal to many.Especially inexperisnced investors. 
 
 

[Deleted User]

Annuities are and have always been a viable choice, ideally as a component in a diversified portfolio. Fashions come and go but that’s another matter. 

robatwork

dunstonh said:

- Firstly, his interests are not aligned with yours.  

yes they are.   All advisers want good outcomes for their client

The truth is of course somewhere in between these. Most advisers want good outcomes, and some are spivs who want only to line their pockets no matter what. Used to be able to spot them by the shininess of their suit.

dunstonh said:

- Secondly, nobody knows and understands your circumstances better than you and advisors are unlikely to spend enough time to truly understand your needs, risk and risk tolerance.

Most consumers don't know or understand what their circumstances

This is very true. However I come back to my point with risk tolerance. A punter is offered:

High Risk/High Reward
Low Risk/Low Reward

normally in the form of a number - are you a young 7? Are you close to sixty? Better be 2 then.
My profile is Low Risk/High Reward. And I think we all are really.  Nobody offers that.

Hence better to self-advise or at least read Tim Hale's Smarter Investing.

Malthusian

robatwork said:

My profile is Low Risk/High Reward. And I think we all are really.  Nobody offers that.

Apart from doing a day's work, of course. 

Hence better to self-advise or at least read Tim Hale's Smarter Investing.

Not if DIYing gives you the idea that low risk/low effort/high reward exists.

snowlaser

Kim1965 said:

Lets hope annuities come back as a viable choice. Im sure the simplicity of an annuity would appeal to many.Especially inexperisnced investors. 
 

Rising interest rates and gilt yields have made annuities much cheaper to buy recently.

Ksw3

Is it true to say, its not robbing if you bought 1,000 units and still have 1,000 units?