It’s what asset allocators think goes on in people’s imagination. We wake up in the middle of the night wondering whether we should be 60; 40 , 20;80 of super diversified with a multiply split personality that has something for everyone and nothing for the someone who we really should be targeting – the person with a need for a replacement wage in later age.
I am almost as annoyed about asset managers charging 5 basis points for a spreadsheet that converts a data capture into an asset allocation as Aron Muralidhar. The technology isn’t hard, the asset allocation model could have fallen off the back of a lorry, Accountability for outcomes is an Excel on some long-neglected drive.
QDIA = Qualifying Default Investment Alternative
DoL = Department of Labour – US for DWP
P&I = Protection and Indemnity
Accountability
Who is accountable for giving away this slice of a saver’s return? Not it seems the savers but their bosses who can load up the AMC in return for the grateful blessing of staff who now benefit from
” a more precise asset allocation that is better aligned with each saver’s unique circumstances”.
The idea is you can dial up or down risk based on knowing whether your punter can afford to f*ck up. My personal favorite is the Trump, where you load up with risk and then load up with lawyers and then crowdfund your way out of trouble by appealing to your extended fanbase to keep you out of jail for fraud.
I’d have the asset managers who are selling this snake oil share a cell with good ole Donald.
Sucker bias
It seems that asset managers are biased to marketing to suckers who see personalised asset allocations as “managed portfolios on the cheap”. I guess the suckers have worked out that managed portfolios are just a more expensive way of selling personalised asset allocations.
There must be one born every minute (as we say over here)
Whatever happened to pensions?
As my good friend Mr Muralidhar reminds us, all this snake-oil doesn’t get me or you or any other punter anywhere nearer a pension, it is just a wealth dump at a future date like Moira Dingle dumping a carload of manure on Ruby Fox- Milligan’s doorstep (this may be lost on American readers)
For those of us who would have our fertilizer spread evenly across our pastures, there is another way. This other way involves people accepting that they may not be the same as everyone else but they are a lot better ganging up with everyone else to get what everyone accepts is the point of a pension – a wage for life paid with or without guarantees or increases for as long as it’s needed,
I write that final word as a sop to Arun whose SeLFIEs run out after a pre-determined number of years. This might appeal to those who enjoy a bet but it’s a tough one to lose.
If you want a rather better bet – try paying some voluntary NI payments
Why is the cost of paying voluntary NI contributions at older ages so ridiculously cheap relative to the expected benefit? Remember that at £900 to buy an extra year it will still be the a giveaway largely to the better off. It is scandalous.
— andrew young (@glesgabrighton) May 7, 2024
Or you can hang around this blog to hear our latest thinking on how Pension SuperHaven is going to turn all these cartloads of dosh to pensions.
