Is Your SIPP Pension Making Any Money?

LHW99

If you go back to the late 80s, all you had was a monthly pink paper publication showing fund performance tables.   There was virtually no due diligence materials available back then.  You trusted that the fund house used was doing the right thing.       So, if you consider that the starting point of where we were and where we are today, that is a big difference.     Some progress faster than others when it comes to stepping up standards.

As a DIY investor by that point, I thought that was my problem. I didn't realise that professional advisors had the same issue!

Roger175

mad1_2 said:

So, I have a review with the IFA sometime in mid August. 

My core question, is why has my pension made under 1% of growth during the period I have mentioned?

What other core questions should I be asking them?

Please bear in mind (which I'm sure you understand now) I have no knowledge of investing so there would be little point me asking complex investment questions which I wouldn't know how to respond to the answers given.

I am happy to increase my risk a little, but I am a little concerned that if their fundamental approach is ineffective that I would just be exposing my diminishing pot to more losses which I cannot afford.

mad1_2 
Having reflected on this thread and my comments in particular, it occurs to me there is something fundamental that I should have asked in the first place. How have you arrived at the growth figure of 0.86%? Have you manually calculated this or are you simply taking the figure shown on Quilter's summary?

You should be doing the former, ie, taking the current value and calculating the % increase on the starting value. The problem with the % shown on the summary is that this is a pretty meaningless figure. All it will show is the change in the value of the investments between purchase and current value. It won't include any separate income. In your case you have mostly 'Inc' funds, so the income (dividends etc) will come in separately into a cash account, rather than be added to the underlying value of the fund as will be the case with 'Acc' funds. Your advisors will then re-invest the income, but that will simply show as a new purchase and then the change in those new investments will begin to show in the bottom line. 

All of the comments given in this thread are on the premise that your SIPP value has only risen by 0.86%, but if you are just quoting the gain from the platform summary, this is going to be wrong - I just thought I'd check this before you go having a 'set-to' with your advisor, only for them to point out the obvious.

mad1_2

Roger175 said:

mad1_2 said:

So, I have a review with the IFA sometime in mid August. 

My core question, is why has my pension made under 1% of growth during the period I have mentioned?

What other core questions should I be asking them?

Please bear in mind (which I'm sure you understand now) I have no knowledge of investing so there would be little point me asking complex investment questions which I wouldn't know how to respond to the answers given.

I am happy to increase my risk a little, but I am a little concerned that if their fundamental approach is ineffective that I would just be exposing my diminishing pot to more losses which I cannot afford.

mad1_2 
Having reflected on this thread and my comments in particular, it occurs to me there is something fundamental that I should have asked in the first place. How have you arrived at the growth figure of 0.86%? Have you manually calculated this or are you simply taking the figure shown on Quilter's summary?

You should be doing the former, ie, taking the current value and calculating the % increase on the starting value. The problem with the % shown on the summary is that this is a pretty meaningless figure. All it will show is the change in the value of the investments between purchase and current value. It won't include any separate income. In your case you have mostly 'Inc' funds, so the income (dividends etc) will come in separately into a cash account, rather than be added to the underlying value of the fund as will be the case with 'Acc' funds. Your advisors will then re-invest the income, but that will simply show as a new purchase and then the change in those new investments will begin to show in the bottom line. 

All of the comments given in this thread are on the premise that your SIPP value has only risen by 0.86%, but if you are just quoting the gain from the platform summary, this is going to be wrong - I just thought I'd check this before you go having a 'set-to' with your advisor, only for them to point out the obvious.

Thanks Roger - I am taking the summary shown on Quilter.

I am doing this as if I were to start drawing down my pension today, that is the value I would be dealing with and the budget I have if I started my retirement. 

I'm not sure monies come into a separate cash account as you've described - but I will ask. Having looked at the values of my investments (again on Quilter) I'm not sure any of them have achieved very much growth in the timeframe I am asking others about, and I am learning others have had more success - particularly in 2024 so far.

They could point this principal out to me (they haven't so far) and as I've said to other contributors, I am not posting online without having had several conversations with my advisors. I simply needed a benchmark and the advice of others - which I have got.

The bottom line for me - and I'm sure everybody - is that my pension grows, is reinvested, and continues to provide me with an income over the long term. I would prefer it does this when I am old/young enough to enjoy life. 

Thanks for your help and your comments - very much appreciated.

Roger175

mad1_2
OK, understood, but you presumably know the starting value when you set this up and what you have added since. It wouldn't take long to do a quick calculation to check. Even if it's just a sanity check. 

Lloyd90

Mine's up 12% this year with me doing the investments myself. 

dunstonh

I'm not sure monies come into a separate cash account as you've described - but I will ask. Having looked at the values of my investments (again on Quilter) I'm not sure any of them have achieved very much growth in the timeframe I am asking others about, and I am learning others have had more success - particularly in 2024 so far.

Income units pay an income. That will go into platform cash within the pension wrapper.   FNZ platforms (which is what quilter uses) do not show the returns on cash.  Just the unit price on the units.

i.e. if a fund has a £1,000 dividend, that goes into the platform cash.  If the cash is in then reinvested, it treats that purchase of units as if it is new money.  So, the value change from book price will not reflect the income paid.

Income units don't get as much growth as Acc units.   However, income units reinvesting get identical growth to ACC units.  However, the platform will show a lower growth figure with income units compared to ACC units.

They could point this principal out to me (they haven't so far) and as I've said to other contributors, I am not posting online without having had several conversations with my advisors. I simply needed a benchmark and the advice of others - which I have got.

Don't you have one adviser?    Plural suggests a different type of service to a typical adviser service.    Normally you have a named adviser who you deal with all the time.  That adviser may have an assistant but you wouldn't normally have multiple advisers.

Audaxer

mad1_2 said:

Roger175 said:

mad1_2 said:

So, I have a review with the IFA sometime in mid August. 

My core question, is why has my pension made under 1% of growth during the period I have mentioned?

What other core questions should I be asking them?

Please bear in mind (which I'm sure you understand now) I have no knowledge of investing so there would be little point me asking complex investment questions which I wouldn't know how to respond to the answers given.

I am happy to increase my risk a little, but I am a little concerned that if their fundamental approach is ineffective that I would just be exposing my diminishing pot to more losses which I cannot afford.

mad1_2 
Having reflected on this thread and my comments in particular, it occurs to me there is something fundamental that I should have asked in the first place. How have you arrived at the growth figure of 0.86%? Have you manually calculated this or are you simply taking the figure shown on Quilter's summary?

You should be doing the former, ie, taking the current value and calculating the % increase on the starting value. The problem with the % shown on the summary is that this is a pretty meaningless figure. All it will show is the change in the value of the investments between purchase and current value. It won't include any separate income. In your case you have mostly 'Inc' funds, so the income (dividends etc) will come in separately into a cash account, rather than be added to the underlying value of the fund as will be the case with 'Acc' funds. Your advisors will then re-invest the income, but that will simply show as a new purchase and then the change in those new investments will begin to show in the bottom line. 

All of the comments given in this thread are on the premise that your SIPP value has only risen by 0.86%, but if you are just quoting the gain from the platform summary, this is going to be wrong - I just thought I'd check this before you go having a 'set-to' with your advisor, only for them to point out the obvious.

Thanks Roger - I am taking the summary shown on Quilter.

I am doing this as if I were to start drawing down my pension today, that is the value I would be dealing with and the budget I have if I started my retirement. 

I'm not sure monies come into a separate cash account as you've described - but I will ask. Having looked at the values of my investments (again on Quilter) I'm not sure any of them have achieved very much growth in the timeframe I am asking others about, and I am learning others have had more success - particularly in 2024 so far.

They could point this principal out to me (they haven't so far) and as I've said to other contributors, I am not posting online without having had several conversations with my advisors. I simply needed a benchmark and the advice of others - which I have got.

The bottom line for me - and I'm sure everybody - is that my pension grows, is reinvested, and continues to provide me with an income over the long term. I would prefer it does this when I am old/young enough to enjoy life. 

Thanks for your help and your comments - very much appreciated.

Good advice from @Roger175 about checking the growth percentage. I also do my own calculations on my investments as the platforms I use don't seem to calculate the growth percentages correctly. I have found that the XIRR function on Excel is the most accurate and best way to do it. It took me a while to get my head round it initially, but once set-up on a spreadsheet, you just add in any payments and withdrawals you make and the dates of these transactions, and it calculates the correct figure. I just thought that might be worth considering.

mad1_2

Roger175 said:

mad1_2
OK, understood, but you presumably know the starting value when you set this up and what you have added since. It wouldn't take long to do a quick calculation to check. Even if it's just a sanity check. 

Yes Roger, I should have said. The main criteria is what my 'opening balance' was compared to where it has been over this period to today.

mad1_2

dunstonh said:

I'm not sure monies come into a separate cash account as you've described - but I will ask. Having looked at the values of my investments (again on Quilter) I'm not sure any of them have achieved very much growth in the timeframe I am asking others about, and I am learning others have had more success - particularly in 2024 so far.

Income units pay an income. That will go into platform cash within the pension wrapper.   FNZ platforms (which is what quilter uses) do not show the returns on cash.  Just the unit price on the units.

i.e. if a fund has a £1,000 dividend, that goes into the platform cash.  If the cash is in then reinvested, it treats that purchase of units as if it is new money.  So, the value change from book price will not reflect the income paid.

Income units don't get as much growth as Acc units.   However, income units reinvesting get identical growth to ACC units.  However, the platform will show a lower growth figure with income units compared to ACC units.

They could point this principal out to me (they haven't so far) and as I've said to other contributors, I am not posting online without having had several conversations with my advisors. I simply needed a benchmark and the advice of others - which I have got.

Don't you have one adviser?    Plural suggests a different type of service to a typical adviser service.    Normally you have a named adviser who you deal with all the time.  That adviser may have an assistant but you wouldn't normally have multiple advisers.

One named adviser from a firm of 'advisers'.