Can DIY pension be the best option for the novice
As the pension market changes more individuals have decided not to seek advice and “DO IT YOURSELF” option.
Using insurance company funds s a higher cost option but switching to a full blown Self Invested Personal Pension (SIPP) without advice is like switching from an expensive dentist to trying to fix your own teeth.In both cases getting it wrong is very painful!.
It all depends on your attitude to risk and most clients who opt for the “DIY” option tend to be more emotional about investing and make the wrong selection and choices or sell at the wrong time.
I was reading an article about a gentleman who had an old style pension plan with high charges and decided to –do it himself as he felt he could look after this at a lower cost.His pension fund started at £95,868.57 It was 1 year on from when he invested and his fund value gross, is now worth £97,906.68 a total return of 2.1%, take away inflation and charges and he has had a negative return for the first year.
Over the same period the AAC funds has returned 13.42% with the weighted sector average benchmark returned 5.42%
We can see that making the wrong decisions can be very detrimental to your retirement planning.In fact he has underperformed the average benchmark by 3.32%.
Seeking Independent Financial Advice would have been the better option by investing in the correct asset mix would have increased the pension to £108,734.13 gross ,was it worth opting for the lower cost option.
I will leave that to you to consider ,you can contact Advanced Asset Consultants for a free no obligation discussion on 01413312434 or firstname.lastname@example.org