Bothered about your pension wealth?

three wise monkeys

In the past few days I’ve had some fruity exchanges with Tom McPhail of Hargreaves Lansdowne about when people should start getting interested in managing their pension pot.

Tom’s view is “as soon as savings begin, mine “when you can be bothered”.

Hargreaves Lansdowne, the firm that Tom represents, are keen to make each of us our own Chief Investment Officer and encourage their customers to select funds from the platform it offers. There is no doubt that, if you get it right, fund picking can be a very lucrative game. Then again, so can picking horses.

This is unfair of me. betting on horses is speculation, there are ways of getting it right more often than not, they usually involve some kind of insider knowledge or a technical advantage like a faster feed from the racetrack. Picking funds is not a speculative business and anyone who tries to trade using funds will soon find they are paying more in charges than they can hope to make up in capital gains.

The business of investing in a portfolio of funds, or in direct holdings in equities and bonds (as Hargreaves Lansdown’s platform will let you do) can be immensely satisfying. There’s a level of engagement in managing wealth amongst those who do it that inspires politicians and corporate leaders. This is where the “financial engagement” agenda is being lived.

But it is myopic, for those who have the bug to believe that others will follow. For most of us, and I include myself in this, a basic understanding of asset classes, an automated system that ensures that I am roughly in the right assets at the right stage of my life and funds that do what they say on the packet – IS ENOUGH!

For me , it is all about making sure the basic package I have chosen works well and delivers efficiently. I will not blame myself, far less fund managers, if markets tank, it is not a fund manager’s job to call the markets , merely to maximise the efficiency of my investment into the fund, GOVERNANCE IS ALL!

I am pleased that when I meet Tom, the cheeky chimp, there is always a smile on his face. He is part of a tremendously succesful organisation that does deliver to expectations. His platform isn’t cheap but it is efficient and his firm does much to educate people to make the right decisions. He knows there are no flies on him.

Likewise, I think Tom knows that I write for a different market, people who like myself, do not worry themselves with ideas about becoming their own CIO, and are happy to be in a pension savings plan that is well run.

I hope that many of the plans I advise on will in time generate the wealth that will enable people to use Tom’s platform properly. In the meantime it’s the one pound fish approach for most of my customers

But for those with small pension pots or with large pots and little interest, we need to continue to develop default mechanisms that do the job.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
This entry was posted in auto-enrolment, Bankers, dc pensions, Financial Education, First Actuarial, governance, hargreaves lansdowne, one pound fish, pensions and tagged , , , , , , , . Bookmark the permalink.

3 Responses to Bothered about your pension wealth?

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