We have just completed the first phase of our annual fund review for 2015.
It is always a nerve racking time to see if performance during the year has been in line with customers’ expectations or whether we may have a busy time helping customers realign their funds to achieve better growth or possibly a more secure haven for their money. While it is always the customer who will decide whether the performance has been satisfactory, we must admit to being quietly pleased with the results.
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With some minor exceptions the majority of our income drawdown customers are split across two providers - AXA Wealth and Royal London (formally Scottish Life), and again most customers choose a passive fund strategy whereby they are matched to a governed portfolio that corresponds with their appetite for risk.
Irrespective of the company, all customers have seen growth on their fund since the last annual exercise, which took place at the same time last year. Those customers who are not taking income can expect to see a higher fund value than last year, and those taking an income have had a good share of that income they have taken replaced by underlying growth. In a couple of circumstances we have had customers take an income and see the value of their fund grow. It can’t be guaranteed but it is nice when it happens !!!
Irrespective of fund size we believe income drawdown fund performance has been good, a few examples would be :
A customer whose income drawdown fund was worth just over £73,000 this time last year, has taken over £5,800 income during the year, but their fund has still grown to over £74,000.
A comparable customer last year had a fund worth just under £62,000, they took and income of over £4,000 and nevertheless find their fund is now worth over £62,100.
We hope those customers taking no income will be happy with performance, below are a few highlights.
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Provider |
Portfolio |
2014 Value |
2015 Value |
% Growth |
Royal London |
Governed Portfolio 2 |
£31,859 |
£34,635 |
8.71% |
Royal London |
Governed Portfolio 5 |
£46,534 |
£50,202 |
7.88% |
Royal London |
Governed Portfolio 6 |
£59,866 |
£63,354 |
5.8% |
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Figures Rounded to the nearest pound
Given the economic climate we feel that these are reasonable returns and show the full impact on the client’s fund after deductions for fund management charges. With this report being issued on the day that the International Monetary Fund lowered its growth rate for 2015 to 3.5% and with the uncertainty caused by a General Election, particularly one where there appears to be no clear winner, then we may be in for a tough year ahead. If when we come to write next year’s report we are able to show income drawdown customers have again grown their funds with figures similar to that reported above we would feel that it was another good years’ performance. In which case we hope our customers would feel the same.
If you would like to know about any other aspect of fund performance and the service we offer customers to manage their own funds, then please feel free to contact us on 020 33 55 4827. |
| By Bob Cook |
| Published : 20th January 2015 |
| Nothing in this article should be taken as personal advice and recommendation. UK tax rates and pension legislation are liable to change and concepts, rates, legislation and rules referred to may not be current at the time you read this article. |
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”Considerate, conscientious and confidence-inspiring”
From the start Bob and his team let us know that they understood our nervousness about deciding what to do with our pension fund. We were never put under any pressure to make a decision; on the contrary, the team were considerate of our need to take our time to think about what we were doing and be satisfied that we were doing the right thing. It didn’t seem to matter how many questions we threw at them – they always replied promptly and in as much detail as necessary and they were always ready to help further.
Indeed, we were very impressed by just how conscientious they are. We received emails and paperwork accompanying every step we took and it would be no exaggeration to say that no efforts were spared to make sure that everything was documented down to the last detail.
Bob and his team inspire confidence and do so in a way that is friendly and familiar. We’re confident that we’ve found someone who understands what’s going on in the pension industry and is able to help us make our own decisions about how best to invest our fund. And we’re happy that this person is someone who’s always very approachable and ready to do what he can to help his clients.
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Mr V. S. - Prague |
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January 2015 |
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