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Topics: Baring Asset Management| occupational pensions| open market option| IFA
Almost half of working Britons never review their pension plans and 38% of those who do select the default option for their scheme, research suggests.
A further 33% do not know where their pension is invested, according to a survey by Baring Asset Management.
Of those who have reviewed their pension plans, as many as 1.3 million individuals said the information supplied to them about how their funds would be invested was poor or non-existent.
Only 11% of working people who have reviewed their pension plans took advice on where to invest from a financial adviser. Just onder one in five (18%) made allocation decisions alone.
"The fact that individuals seem to continue to take little or no interest in financially planning for their retirement is of real concern," Barings chief investment officer Marino Valensise (pictured) says.
"The industry needs to improve the way in which pension advice is given so that people better understand the levels of risk and return that they can expect from their portfolios.
"With the markets behaving so turbulently over the past few years, pension holders should be sure to review their schemes on an annual basis.
"I would urge them to seek independent financial advice when they do so to ensure their portfolios are correctly positioned for their needs and not just put into the default option funds for the sake of ease."
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Sanctimoniosity
Firstly, there is no research, of which I am aware, that confirms the implication that reviewing a pension’s investment arrangement provides positive results. We merely assume that it does. There is more anecdotal evidence that doing nothing is a good option than vice versa, but that is merely heresy. Secondly, even when a person has an adviser there is little evidence that people do review their pension arrangements even when a review is offered to them. So please explain to me how and why the industry should and can “improve the way in which pension advice is given”. And can anyone genuinely express a view on the relationship between risk and reward after the last 5 years. And what proportion of advice in that time turned out to be good. If people are not interested, for whatever reason, in matters financial sanctimonious statements like the one above are not merely meaningless, but more dangerously feed the FSA’s insatiable appetite for believing the absurd. Perhaps we should go round to every client who has a pension and physically batter them into “doing something” about their arrangements. It’s funny but I used to believe that we live in a society in which people are free to choose to do what they want. Obviously the Financial Fundamentalist Priesthood think otherwise.
Posted by: Glen McKeown