Newsgroups: uk.finance
Subject: Re: Pension moving charges
From: alan.frame@acm.org (Alan Frame)
Date: Tue, 12 Jun 2007 19:34:39 +0100

John Boyle  wrote:

>  writes
> >John Boyle  wrote:
> >
> >> Otherwise, if he is transferring you to Skandia Sipp Deal then that is
> >> certainly a better place to be than were you are at the moment, so long
> >> as he selects the best funds for you.
> >
> >And what comeback do you have if he *doesn't* select the best funds?
> 
> He should go through a risk modelling tool with the investor and have a
> long discussion to correctly identify the clients requirements and 
> attitudes. 

MODO is that there is *no* correct answer to that - all the KTC &
"attitude to risk" in the world is inferior to taking the time & effort
to work it out for yourself.

If people can't be bothered to do that - on the largest (or 2nd largest)
purchase of their lives, then the old 
(age as % in bonds), split the rest between equities & cash might be a
reasonable (but bad) approximation.

I really don't believe most people can provide sensible answers to 
"When do want to retire & how much income do you want?" - apart from "As
soon as possible with as much as possible" :->

Circumstances & requirement change, and projected returns are only an
unlikley example of one /possible/ outcome.

Real long-term returns - from all three major asset classes - are pretty
random.  _Taleb_[0] is worth a read for a view on how humans can't
handle randomness. 

>This should be better than any of the funds he has been in  hitherto.

I'll agree with that, 'tho.

> >A full refund?
> 
> Ha! :-)

Butbutbut, when you pay a surveyor, lawyer or accountant to "identify
your requirements and attitudes", then you can sue them if they get it
wrong....

You can't blame an IFA (or fund managers) if the returns don't match
what you expect, so why pay 'em to *not* share the risk?

> >With 150K to play with and an unknown number of years 'till retirement,
> >I'd hazard a guess that it's likely to be beneficial to consider
> >choosing & understanding the underlying investments.
> 
> That depends largely on the individual and most people dont want that.

 If they don't want that, then they are likely to have lower
income in retirement than if they had made the effort.

> For in excess of £100k a discretionary fund manager managing collectives
> might be best value.

Or just stick it in a SIPP and buy some gilts and some of the big global
ITs for possibly similar performance at *better* value.

rgds, Alan
[0] _Fooled By Randomness_ http://www.fooledbyrandomness.com/
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