The value of pensions and investments can fall as well as rise, you may get back less than you invested.
As a financial adviser and financial risk manager (I have a Masters Degree in Financial Risk Management & have worked in an Investment Bank as a Market Risk Manager) , I take the risk seriously. Whether it be, market risk, credit risk or currency risk, all are as equally important as the next and need to be managed carefully.
Consider this then:
If you have a genuine and specific concern about your health you see a doctor, preferably one with the right qualifications, a specialist; The better the doctor is in their specialist field, the better chance of getting good treatment and therefore a positive outcome is more probable.
If you want to protect and grow your money you see a financial adviser, preferably one with the right qualifications and experience, someone who has worked in the financial markets and preferably someone who is adept at managing financial risk: the better the financial adviser the higher the chance of getting good advice and the more probable a positive outcome for your money.
Why then do many of us engage with the wrong advisers? And why do many of us leave our retirement planning to chance and only engage with the process just as we are about to retire?
Pensions are one of the most important financial assets in our lives and it is key to have an expert work with you throughout your lifelong financial planning process. If you do this you are much more likely to see a positive outcome and one which you are happy with.
Here are some simple questions and statements to consider when thinking about retirement planning and your pension:
- The earlier you start saving for retirement the better off you will be in retirement.
- Have you really considered how much money you need to fund your retirement?
- Annual Management Charges (AMC) affect the performance of your pension materially: What is the Total Expense Ratio (TER) on your pension?
- Do you know how trading costs affect your pension?
- How will the Chancellor’s proposed pension legislation affect your money?
- Annuities rates are not attractive: Take advice before you buy.
- If you have a pension, do you know what you are invested in and more importantly perhaps, why?
- Can you switch funds easily and without penalty charges if you need to?
- Is your pension being risk managed?
- Do you receive regular performance reporting? If not, why not?
- Is your financial adviser proactive in providing you with market, economic, geo political, regulatory and legislative updates? More importantly though, how does this fast changing backdrop affect your investment?
Perhaps the most important advice I give to my clients is to plan carefully and consistently and do not leave things to chance.
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