The quest for the perfect solution is the adviser’s holy grail. Idealistic young IFAs set out with a view that there is a perfect market and that they can as “whole of market” advisers “optimise the customer experience“.
The song of experience over innocence leaves few idealists among the 50 plus cohort, of which (sadly) I am one. We know that the idea of buying at the bottom , selling at the top or of picking a pension fund that will outperform over 40 years is as likely as Yeovil Town getting promoted from Division one (stop- what am I saying?)
While miracles do happen, most pension funds (like football teams) look to play in the top half of the league more seasons than not and be around to deliver their members (fans) a lifetime of reasonable returns.
The most we can hope for as members is sustained good management, an avoidance of catastrophic risks and a long-term committment to good member outcomes.
My point is that not one of these six pension arrangements is open to new business and only two of these providers know where I live. Allied Dunbar now trade as Zurich though my pension doesn’t, General Portfolio are part of one of the Zombie Life companies, NPI part of another, the Prudential are no longer actively seeking business in the UK while Schroders morphed into Investment Solutions and Gissings is part of the Capita Empire. Though all these companies have “moved on”, their customers haven’t.
The decisions I took to join the personal pensions , or were taken for me by employers (when I became employed) were all taken advisedly (I advised myself) but none of these decisions turned out particularly well. For “holy grail” read “wholly frail”.
In the summer , my company will re-establish its workplace pensions and I am determined to aggregate the various benefits into one so I get a manageable pot from which I will be able to draw a reasonable income when (annuity rates rising) I am able to afford to swap pot for pension. I know that I will take a massive hit on some of these pensions which still have lower surrender values than the quoted value of the funds. But I’ve decided that enough is enough and I’m happy to take the pain today rather than risk more “non-management” of my funds.
My experience is that of an industry professional, and when I take a step back, I realise that the industry has not done me proud. It hasn’t done the simple things well and it’s done the complicated things badly and I’ve got more reasons than most to know!
There are 1.2m companies who have to take the decision to stick with their existing workplace pension, twist and get a new one or – if they are new to the game – work out what is good as “first time buyers”.
The least we can do is to try and make life a little easier for them, than it has been for us!
- Cheddar mountain helps pension fund (bbc.co.uk)