Past Pension performance

J

Johnny apples

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Hi all, first time poster on financial side of AAM . I'm looking to set up a PRSA this year . I've met with a broker and I'm not a whole lot wiser especially when it came down to past performance . It's easy enough to see the performance of funds eg Zurich, Irish life etc , but my broker tells me that they'll put some in this and some in that , which might make it impossible for me to see if I'm getting what the actual funds are returning. If I tell him that I want to be put into a particular Zurich / irish life fund , then everything should be transparent, which means I'm doing the thinking and don't need a independent broker and would be better off with an execution only broker. Am I oversimplifying this process. Thanks
 
Your post/question isn't very clear.
If you put money into any investment then the performance should be clear by checking the statement/valuation at a later date and comparing it to what you put in.
This is the case whether your money is invested in one or multiple funds in a pension.

On a more general point, when it comes to a pension (or any similar investment) it makes sense to check the charges, try to minimise them and to invest in a suitable asset mix. For many people the latter may well simply be a mostly or all equity passively managed index tracking fund.

Keep things simple. Don't over think things.
 
Is it a case where the broker is looking to out a bit in Prisma 2, and bit in Prisma 3 and a bit in Prisma 4 or some such?

I find that approach ridiculous, as there's likely a single fund that would have the asset and risk allocations of that blend, without the need to manually rebalance and possibly at a lower cost.
 
Thanks Clubman, I'll try to be clearer . It's only after my initial meeting him , did these questions arise. (It's a lump sum ) , he said that he'd be putting it into a balanced fund, not too much risk and in maybe 6 months, some might be moved into something a little riskier and some into something else. (This was my understanding of what he said) My question, I suppose is , will these movements mean that I'm now spread between 2 or 3 funds instead of the 1 I'll start out in . I will be asking him these questions but a little knowledge would be beneficial.
 
Johnny apples said:
he said that he'd be putting it into a balanced fund, not too much risk and in maybe 6 months, some might be moved into something a little riskier and some into something else.
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If he said that then I would stop talking to him immediately!
This is classic timing the market fallacious thinking.
And it sounds like he's complicating things unnecessarily.

If you are starting a pension and have many years to go to retirement (and arguably even when you are closer) you should just pick a low charges pension option and stick all of your money into a mostly/all equity fund - in my opinion an all equity passively managed index tracker.
Then sit back and just let the contributions and growth accumulate.
There will be ups and downs but trying to hedge/time the market is a really bad idea.
 
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Johnny apples said:
he said that he'd be putting it into a balanced fund, not too much risk and in maybe 6 months, some might be moved into something a little riskier and some into something else. (This was my understanding of what he said
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A Balanced Fund is a mixed or multi-asset fund. That means that the allocations to the different asset classes can change from time to time depending on the view of the management team.

It's quiet possible that this is what he meant.

I presume you did a fact find / risk profiler and this is the fund he's recommending, based on all the information you've given him.


Gerard

www.prsa.ie
 
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Fortune said:
Is it a case where the broker is looking to out a bit in Prisma 2, and bit in Prisma 3 and a bit in Prisma 4 or some such?

I find that approach ridiculous, as there's likely a single fund that would have the asset and risk allocations of that blend, without the need to manually rebalance and possibly at a lower cost.
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I'd agree with you . I thought I'd be paying into a fund or two that suited my profile , but when he mentioned moving some, it's then I started to wonder. I don't think I misunderstood him but maybe I did. I'll know and understand more when we meet again
 
Hello,

Can I ask a few basic questions, to help get a better understanding?

* How were you introduced to this broker?

* Is the broker truly independent, and advising you on a fee only basis, or are they affiliated with certain companies, where they may hold an agency, and be paid commission (so not truely independent)?

* have you done any research on the broker, to see if they've got good references online, and what relevant qualifications they hold (you'll often find this, if your search for them on LinkedIn, for example)?

You've mentioned that you've an initial lump sum - what is the allocation rate that the broker is proposing for this lump sum, will it be 100% of the investment (or possibly even a little higher, as can sometimes be the case, to help to win new business).?

What will the fees be for subsequent regular contributions?

Questions raised by @GSheehy above are also very relevant, re: fact find etc.
 
As a new poster ,I'm restricted with how often I can reply.
Thanks G Sheedy, you're probably right and I've misunderstood the broker and yes I filled out the risk questionnaire.
MrEarl ,I was introduced by my accountant. The broker is part of the accountancy firm. And no I didn't do what some may call a proper reference check as I hope my accountant wouldn't put me wrong. I've not committed to this offer, The firm sell for a few different pension providers. It's 100% allocation but the AMC is higher than it should. I've spoken to a different broker and the amc is considerably better for the same service and providers. In the meantime I'm educating and familiarising myself with what's available. I would go it alone and pick my own funds if I were able to understand and pick a diversified port folio as in 1,2 or three different products from one provider or maybe one fund would give enough diversity and risk.
 
There are so many different funds out there that there really is no need to have a number of different funds anymore, there is always a fund that will encapsulate all these different funds in just one. And they are designed by some of the leading authorities in capturing the returns of the stock market such as MSCI.

You should also completely disregard risk profiling tools that recommend a fund at the end of it. They are completely useless as risk profiling tools and should be banned. They tick a compliance box but I would argue that they actually lead to bad advice and some investors being recommending investment funds that are wholly inappropriate to their actual needs and risk tolerance. And the are skewed towards certain funds. Zurich Life has over 60 different funds but at the end of their risk profile, they always recommend a Prisma fund (there are 6 different Prisma funds). Irish Life are similar offering MAPs funds despite having a similar amount of funds to Zurich Life.

Pick a strategy that is right for you from the outset. Know what they potential risks are and then set and forget.

I have plenty of clients give out to me for not recommending any changes to their portfolio. A portfolio of global stocks is a diversified portfolio which will grow over time without taking unnecessary risk. What else do you want?


Steven
http://www.bluewater.fp (www.bluewater.fp)
 
Hopefully, meeting different broker next week. Spoke to him over the phone and happy to meet him . He gave me some prices and other information. I feel I could research all I want but still won't have confidence / knowledge to put my pension into something I really don't understand. I'm happy to meet this guy and see what he proposes.
 
Johnny apples said:
Hopefully, meeting different broker next week.
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What sort of broker?
How independent are they?
Johnny apples said:
I feel I could research all I want but still won't have confidence / knowledge to put my pension into something I really don't understand.
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Why not do what I suggested?

Past Pension performance

Hi all, first time poster on financial side of AAM . I'm looking to set up a PRSA this year . I've met with a broker and I'm not a whole lot wiser especially when it came down to past performance . It's easy enough to see the performance of funds eg Zurich, Irish life etc , but my broker tells...
www.askaboutmoney.com
 
Clubman,  Im going to have to go through a broker to buy eventually , be it one of your suggestions or otherwise. His prices and allocations are not any more expensive than some execution only prices He's given me the choice and prices of 3 different providers , he'll talk me through and then it's my decision. He's got favorable mentions on this site from time to time
 
Johnny apples said:
Clubman,  Im going to have to go through a broker to buy eventually , be it one of your suggestions or otherwise. His prices and allocations are not any more expensive than some execution only prices He's given me the choice and prices of 3 different providers , he'll talk me through and then it's my decision. He's got favorable mentions on this site from time to time
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Can you mention who he is
 
Johnny apples said:
Clubman,  Im going to have to go through a broker to buy eventually , be it one of your suggestions or otherwise. His prices and allocations are not any more expensive than some execution only prices He's given me the choice and prices of 3 different providers , he'll talk me through and then it's my decision. He's got favorable mentions on this site from time to time
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Ok, but personally I think you're overthinking this too much.
 
Steven Barrett said:
Zurich Life has over 60 different funds but at the end of their risk profile, they always recommend a Prisma fund (there are 6 different Prisma funds).
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Not really. There may have been a time when the default was ( A 'Simple Solution') Prisma fund but it now allows you to tailor a bespoke solution based on the risk profile result. That said, relative to their peers in the multi-asset market, there's nothing adversely wrong with their simple solutions.
 
GSheehy said:
Not really. There may have been a time when the default was ( A 'Simple Solution') Prisma fund but it now allows you to tailor a bespoke solution based on the risk profile result. That said, relative to their peers in the multi-asset market, there's nothing adversely wrong with their simple solutions.
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The results of a risk profiling questionnaire should be the start of the conversation about investment risk. Funds should not be recommended at the end of taking a questionnaire.

The client usually flies through these things and you can question how seriously they take them. The options available may not represent the clients feelings on the question.

I remember getting a retired client to complete a risk profiling questionnaire. He scored 95 out of 100, a real risk taker. He loved going to Vegas and playing poker. He'd go there with a certain amount of money and would happily play until it was all gone. But when we had a discussion about the investment of his ARF he said "Steven, this is all the money I have. It's to do me and my wife until we die. I can't risk it like I would when I go to Vegas".

A risk profiling questionnaire would have stuck him in high volatility funds as a result of the questionnaire he answered. Because there is no follow up questions to see how people really feel about money and investment risk.

I think they are useless.
 
Steven Barrett said:
I think they are useless.
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I'd disagree, in the context of someone who knows what they're doing. Completing one, honestly, is far better than the new trend of going with the herd mentality on some forums and going all in on 100% equities. First sign of a dip in markets and those folk are back with 'What'll I do now? It's dropped 2%, should I switch to cash".

Maybe it's just the business model I use and the trends that I see. I might do an overview of where execution only is at at the moment. Never had to turn away so many people on that service as they were just not suitable at all.

Steven Barrett said:
Steven, this is all the money I have. It's to do me and my wife until we die. I can't risk it like I would when I go to Vegas".
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Ah, the Vegas stuff was bluff and bluster. He wasn't investing his money, he was investing their money and he understood the difference :)

He'd have asked herself to complete the risk profiler as well and they'd have agreed on a compromise.
 
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