I spent the early part of this year consolidating my various pensions putting them all in one place. It was a right hassle with the various pension providers making the change as difficult as possible, even the recipient provider seemed to want to talk me out of it.
I’d made the move following a review with a financial advisor who produced a 100 page book of charts and tables that rated the performance of my various disparate investments.
It included dozens of lifetime wealth forecasts showing ‘what if’ scenarios around various potential investment portfolios.
Somewhat reassuringly all seemed to suggest that I’d have at least some money left even if I lived to a 100. In truth there wasn’t a great deal of difference between following their recommendations and just keeping my money where it was.
That didn’t stop them, somewhat predictably, recommending that pretty well all of our investments – except for my small final salary scheme and some cash for a rainy day – should be given to them to manage.
This would involve an initial fee of 3% of the total sum invested and then ongoing fund, platform and advisor charges of around 2% a year. This was much higher than the fees I pay via my existing investments and at no point could they explain why they would do 2% a year better than the people behind the pensions and funds I currently invest with.
These advisors came highly recommended, seemed honest and decent, did a great deal of research but disappointingly came to exactly the same conclusion as all other financial advisors. Give us all your money and for a big fee and we’ll do the rest.
I was tempted briefly to hire them but in the end I made use of the research, consolidated my pensions and moved cash to higher interest accounts. I didn’t feel too bad about this as we’d paid a small fee for the research and judging by the advisors’ top of the range Tesla and sumptuous high-tech offices he’d survive without my cash!
Now, after four months of lockdown and very little spending I find myself I’ve accumulated about £5,000 of extra cash and have little idea what to do with it.
Since I became semi-retired I’ve lost any desire to make big purchases. I could, for example, put it towards a new car which I’ve been thinking about for years but can’t see me buying one any time soon.
The interest rates on savings account are at a historic low and even the long-term fixed rates are not worth the risk of tying up your money only to learn that interest rates have gone up while you’re still locked in.
I don’t fancy adding more cash into the self-trading share portfolio I dabble with which is just so volatile. Maybe I could put it in a shares-related fund I have which seems to have done ok over the years but is now the right time? Then I guess I could put more into my pension but it might be useful to have some access to the cash.
There are bonds, investment trusts and other forms of investment to be considered too. Trouble is the landscape is so complex, so risky and there’s really no one you can trust to work in your interest.
It’s just another one of the ways in which life has got more complicated I’m going to set myself the deadline of this week to make a decision and get down to some research.