did anyone's financial advisor tip them off before the crash

lukegriffen · 14-03-2020 10:48am #1

hi
i have a private pension & an investment fund with a life company, and i meet my advisor once a year, and make an annual contribution/premium.

i'm a bit annoyed with myself that i didn't see this coming, it's obvious in hindsight, but i'm also wondering why my financial advisor didn't drop me an email and recommend that I switch to bonds/cash for a few months .

i guess i'm asking what exactly is the role of a financial advisor (is it just to give advice at the time of investment) , & did anyone's financial advisor tip them off before the crash?

Thargor · 14-03-2020 10:57am

You're annoyed that you didn't see a massive global pandemic coming in the middle of an oil price war?

Mad_maxx · 14-03-2020 1:34pm

Thargor wrote: »

You're annoyed that you didn't see a massive global pandemic coming in the middle of an oil price war?

The CV crisis was with us before the Russians and Saudis went nuclear on each other in order to try and bankrupt American shale industry

Mad_maxx · 14-03-2020 1:36pm

lukegriffen wrote: »

hi
i have a private pension & an investment fund with a life company, and i meet my advisor once a year, and make an annual contribution/premium.

i'm a bit annoyed with myself that i didn't see this coming, it's obvious in hindsight, but i'm also wondering why my financial advisor didn't drop me an email and recommend that I switch to bonds/cash for a few months .

i guess i'm asking what exactly is the role of a financial advisor (is it just to give advice at the time of investment) , & did anyone's financial advisor tip them off before the crash?

The guy you meet goes by what someone up the food chain says, he most likely has never even met them as they are likely based in London or new York

He perhaps - probably could have decided himself to do some switching but the vast majority of people in that industry are little more than sales persons repackaging a product made somewhere else and do little bar making sure they get their slice of the pension commission pie

Besides, a pension is a multi decade exercise, this collapse came awful quick as well so it would be harsh to criticise the guy too much

poppers · 14-03-2020 1:36pm

if finicial advisers were that good at predicting markets they would not be working just making millions for themselves.

Fireball81 · 14-03-2020 1:37pm

Mad_maxx wrote: »

The guy you meet doesn't manage the fund, he goes by what someone up the food chain says, he most likely has never even met them as they are likely based in London or new York

+1

delly · 14-03-2020 1:41pm

Can you switch to cash temporarily? Ironically I started to pay into a pension this year, very small amounts, but it's already down 20%. The money I have waiting to go next month will be down as soon as it lands in their account. Pension is with Zurich.

rob316 · 14-03-2020 1:42pm

lukegriffen wrote: »

hi
i have a private pension & an investment fund with a life company, and i meet my advisor once a year, and make an annual contribution/premium.

Because they are glorified salesmen. If they could predict the markets they'd be dealing with private equities themselves.

Other people play around with your money, your "financial advisor" will never never advise you take money from a fund like your describing.

Atlantic Dawn · 14-03-2020 1:44pm

Look at it this way, last year when you were buying say 10 shares for €10 in a company you saw as being financially sound, right now with your €10 you might be able to buy 20 shares in that same financially sound company...that's one way to look at it and why lots of people made an absolute fortune in the last crash. Others started buying in 'safe times' when stocks recovered and made little. Don't take this as advice to blow your life savings but it's one way of looking at the markets when they are down.

hurikane · 14-03-2020 1:49pm

Spoke to my advisor at the beginning of January. Told him I was concerned and wanted to convert to cash. He talked me out of it. Down 20% now.

Jim2007 · 14-03-2020 2:01pm

Mad_maxx wrote: »

The guy you meet goes by what someone up the food chain says, he most likely has never even met them as they are likely based in London or new York

He perhaps - probably could have decided himself to do some switching but the vast majority of people in that industry are little more than sales persons repackaging a product made somewhere else and do little bar making sure they get their slice of the pension commission pie

Besides, a pension is a multi decade exercise, this collapse came awful quick as well so it would be harsh to criticise the guy too much

OP, best ignored this... review the poster's history... he knows no more that you do in the end.

@Mad_maxx: Time for you to go learn about investing and stop seeking social validation for your nonsense.

Mad_maxx · 14-03-2020 2:14pm

My fiancé and I hope to move house next year, i put 40 k to work in January 2019, was worth 53k the day before the general election here, it's worth 35k now as i was only in two stocks, CRH and Smurfit Kappa

I only had a third of my savings in the market and thought letting it ride would bump up our spending pot in advance of buying the new house, goes to show you that you should not put a penny in the market unless you can do without it for five years minimum

Jim2007 · 14-03-2020 2:18pm

lukegriffen wrote: »

hi
i have a private pension & an investment fund with a life company, and i meet my advisor once a year, and make an annual contribution/premium.

i'm a bit annoyed with myself that i didn't see this coming, it's obvious in hindsight, but i'm also wondering why my financial advisor didn't drop me an email and recommend that I switch to bonds/cash for a few months .

i guess i'm asking what exactly is the role of a financial advisor (is it just to give advice at the time of investment) , & did anyone's financial advisor tip them off before the crash?

At this stage probably everyone with pension fund feels the same, but nobody can predict this kind of outcome, it is just guess work. So there is not point beating yourself up about it.

The main think that your advisor needs to have done is ensure that your asset allocation is appropriate for your age and health situation. If you are a young person then he should have had you well exposed to the equity market and you should expect to see a very big drop in the value of your fund and given the time frame with will come back and grow again in the future.

If on the other hand you are an older person say someone in their late 50s or early 60s and you are very exposed to the market, say 60% or so, then yes unfortunately there is something to be concerned about. And something that you may need to take action on.

We don't know your personal affairs nor the advice you were given, so I'm not going to draw any conclusion there. Just to say no advisor can protect you from this kind of situations.

My advice would be to look at your portfolio and your age etc.. as I said and if you are in the latter situation, go talk to your advisor - he has all your personal details. And see what he has to say - if you are in this situation and he is not coming up with some kind of plan to limit your losses, then it is time to speak to someone else.

bizidea · 14-03-2020 2:47pm

Never trust anyone else with your money simple

phantom_lord · 14-03-2020 6:10pm

Mad_maxx wrote: »

market unless you can do without it for five years minimum

Yeah, if you look at threads in this forum that has usually been mentioned.

It's a good lesson for younger people too, to follow the advice to reduce risk closer to retirement.

If you've a pension with a 20+ year horizon you shouldn't be concerned about what's happening now.

aristotle25 · 14-03-2020 6:13pm

My pension is down 25%, so quite a large hit. But its about the same value as it was 12 months ago, so also not the end of the world.

I keep telling myself I have 25+ years to retirement so it will eventually be just a blip.

In hindsight I wonder should I have known to move to cash, but at the time the news was up and down a bit and the drop happened quickly enough. I doubt the pension company would have moved it to cash the same day I asked it to, it probably would take at least a few days, at which time the damage was mostly done. And I believe in just keep investing given the long timeframe.

Keeping in perspective, its a big dip and it will probably go lower but it is or soon will be a good time to invest the 2019 AVC into the pension.

AngryLoner · 14-03-2020 6:16pm

Wouldn’t temporarily moving stocks into cash encur a giant cgt bill on any profits?

Better just leaving it there and wait for the inevitable rise?

Coil Kilcrea · 14-03-2020 6:49pm

Leave well enough alone, you will do very well over the next 10+ years. This will pass after a while. Max your AVC's and take advantage of these prices.

sabat · 14-03-2020 7:51pm

delly wrote: »

Can you switch to cash temporarily? Ironically I started to pay into a pension this year, very small amounts, but it's already down 20%. The money I have waiting to go next month will be down as soon as it lands in their account. Pension is with Zurich.

Do you pay tax at the higher rate? If so you've made money.

touts · 14-03-2020 7:57pm

I saw this coming. Moved all my shares into gold. So happy I did.

And I call bull**** on myself. Almost no one saw this coming but there will be lots of Con artists over the next few years who will sell their services on the basis that they sold everything before the crash. Of course they probably sold everything because the revenue sheriff was pounding on the door with a battering ram but they will leave that part off the book cover.

ebayissues · 14-03-2020 8:27pm

lukegriffen wrote: »

hi
i have a private pension & an investment fund with a life company, and i meet my advisor once a year, and make an annual contribution/premium.

i'm a bit annoyed with myself that i didn't see this coming, it's obvious in hindsight, but i'm also wondering why my financial advisor didn't drop me an email and recommend that I switch to bonds/cash for a few months .

i guess i'm asking what exactly is the role of a financial advisor (is it just to give advice at the time of investment) , & did anyone's financial advisor tip them off before the crash?

Is this the role of a financial advisor....sounds more like private wealth management

Financial advsior will help you with managing your expenses, budgeting etc. For pensions, based on your age, risk and retun preferences, liquidity needs they can recommend what aset class/ fund to invest yor money into. Stocks or bond... ..developed markets equities vs Global market equities.

Financial Advisor should have a basic understanding of these funds/investments and the risk but they wont actively know the markets to offer insights into sector rotation which is what you want.

To have a solid understanding of to say switch to bonds/cash/emerging markets/growth/value stocks, even the professional struggle with the timing of this....................Unless they have worked as equity research analyst/PM/traders/economists, you are barking at the wrong tree etc.. Most of the F.A I've come across do not even have have CFA/technical discpline engineering/quant finance etc and even a solid experience in a known financial institution.

delly · 15-03-2020 2:21am

sabat wrote: »

Do you pay tax at the higher rate? If so you've made money.

No, lower rate. Loss is now just under 30%. Waited so long to start this, should have wait another year I guess.

Diairist · 15-03-2020 11:17am

touts wrote: »

I saw this coming. Moved all my shares into gold. So happy I did.
.

I am now told (after the fact) that in a crisis gold goes up then gets liquidated so it falls. I'm confident it will go back up but everyone is desperate for cash at the moment.

bilbot79 · 15-03-2020 11:21am

My pension was up 14% a few weeks back. Now it's -2 but obviously still in loads of profit due to tax benefits.

This is why it moves to cash the closer you are to retirement which for me is 20 years away. I'm gonna make a big avc now while stocks are low the switch to aggressive risk policy for say 10 years.

delly · 15-03-2020 8:09pm

To those who say ride it out, why is that a better option than switching to cash now then switch back to your regular fund in 6 months as an example? Can you rejoin a fund the same as anyone who hasn't switched?

douglashyde · 15-03-2020 8:54pm

I have also been bracing for a global down turn for the past 12 months and have held mostly physical gold / bitcoin, but the majority in cash.

I'm also not particular 'apt' at reading the markets but I do listen to Ray Dalio / Peter Schiff / Berkshire Hathaway (Warren Buffet) and our own David McWilliams who have been crystal a clear that we've been at the end of a bull run for a while now, top this with QE and low interest rates it was inevitable, this Black Swan event just escalated it (massively).

Financial Advisors are great for tax advice/ long term pension planning etc. but I think there are far better sources of information available and I would never rely on one to make specific stock picks.

There's value now in energy/airline/ bank stock - but there's more hurt to come in the market in general. Buy the dip // blood in the street and all that jazz.

ebayissues · 15-03-2020 8:59pm

delly wrote: »

To those who say ride it out, why is that a better option than switching to cash now then switch back to your regular fund in 6 months as an example? Can you rejoin a fund the same as anyone who hasn't switched?

Right now, you have unrealised loss. if you switch to another fund, your pension manager will have sell them at current values therefore you'll have realised losses.

Enter name here · 15-03-2020 9:02pm

Buy low sell high, this is market where with patience alot of money can be made.

douglashyde · 15-03-2020 9:28pm

The (not so) conventional wisdom here is , 'don't time the market, it's time in the market'

Yes, in theory you are correct, however if it's a pension fund you need to be thinking very long term.

If it's a regular fund you are trading then each to their own but my opinion is that there is a lot more hurt to come in most US markets (exceptions might be energy as there's another outlier event at play here)

Negative_G · 16-03-2020 2:46am

If someone has circa 50k not providing much of a return, what would be the general advice to make the most of the current economic turmoil.

Apollinaris · 16-03-2020 3:21am

About a year ago I switched both my wives and my own pension funds from a share based fund to a bond based fund. I was a laughing stock when I missed out on the highs of the market the end of last year. What made me switch funds was I was very concerned about the very overinflated stock prices (TESLA! and the likes) for me it looked like people and financial institutions borrowing the almost free money and then they reinvest it in the stock market, the only game in town according to everyone. Soon enough I feel I’m going to do a reverse switch, buying share based funds again. Financial advisor is an absolute joke of a job description by the way.

Apollinaris · 16-03-2020 3:28am

delly wrote: »

To those who say ride it out, why is that a better option than switching to cash now then switch back to your regular fund in 6 months as an example? Can you rejoin a fund the same as anyone who hasn't switched?

If you are switching to cash now you realise your losses straight away. If you switch back in 6 months as you said above you’ll have significantly less money to buy less fund units, if that make sense. If you keep your fund choice in shares now, you can buy shares with a 20% discount compared to last year.

Jim2007 · 16-03-2020 9:51am

delly wrote: »

To those who say ride it out, why is that a better option than switching to cash now then switch back to your regular fund in 6 months as an example? Can you rejoin a fund the same as anyone who hasn't switched?

Do you understand why the dollar cost averaging strategy works? It works because in down markets you have a chance to buy more units at reduced prices. If you try to jump in and every time there is an issue then you miss out on a key part of the strategy.

rgace · 16-03-2020 12:45pm

delly wrote: »

To those who say ride it out, why is that a better option than switching to cash now then switch back to your regular fund in 6 months as an example? Can you rejoin a fund the same as anyone who hasn't switched?

The best time to be paying into your non cash fund is while prices are dropping, as long as you are not close to retirement this is nothing to worry about.

The J Stands for Jay · 16-03-2020 12:51pm

Jim2007 wrote: »

OP, best ignored this... review the poster's history... he knows no more that you do in the end.

@Mad_maxx: Time for you to go learn about investing and stop seeking social validation for your nonsense.

The advisor isn't there to tell you when to time the market, the advisor is supposed to have you set up you finances to achieve your goals. The asset allocations of investments are chosen to attempt to mitigate these situations.

You'd be surprised to know how many of these lads do get to meet fund managers. Funds are managed all over the place. There's no need for them to be in London or New York, and most of the funds Irish pensions are in aren't managed there.

TBH, I'd be a bit wary of advisors who are telling pension clients to switch based on short-term price movements.

Millionaire only not · 16-03-2020 1:04pm

Mad_maxx wrote: »

My fiancé and I hope to move house next year, i put 40 k to work in January 2019, was worth 53k the day before the general election here, it's worth 35k now as i was only in two stocks, CRH and Smurfit Kappa

I only had a third of my savings in the market and thought letting it ride would bump up our spending pot in advance of buying the new house, goes to show you that you should not put a penny in the market unless you can do without it for five years minimum

There good stocks , no fear of ur money

Millionaire only not · 16-03-2020 1:08pm

delly wrote: »

To those who say ride it out, why is that a better option than switching to cash now then switch back to your regular fund in 6 months as an example? Can you rejoin a fund the same as anyone who hasn't switched?

Turn off ur phone and stop reading about what u have invested it will recover ! China was only 6 weeks and once the vaccine is there for sure watch stocks jump !

Zascar · 16-03-2020 1:18pm

I had been saying to myself to switch my pension into a less aggressive fund - something mainly on bonds etc - and of course I never did it and now its way down. Gutted. Wondering should I still do it now as I truly think this is just the beginning of a very large downfall, better safe than sorry.

Only issue is Mercer have closed their dam phone lines so I can't even call them ffs - also not sure how long it takes to do t and if any fees will be incurred.

Thoughts?

krissovo · 16-03-2020 1:57pm

No one here can offer advice without knowing your personal circumstances. Everything depends on when you need your pension. My fund has gone through 2 crashes and each time recovered better than expected through some simple risk management using the assumption the market will recover over time, it always has. I am 10 years away from cashing mine in so this will be my last time switching to the high risk option which I am doing now. As soon as it recovered and hopefully made some money I will switch and stay on low risk strategies.

Jim2007 · 16-03-2020 4:00pm

Zascar wrote: »

I had been saying to myself to switch my pension into a less aggressive fund - something mainly on bonds etc - and of course I never did it and now its way down. Gutted. Wondering should I still do it now as I truly think this is just the beginning of a very large downfall, better safe than sorry.

Only issue is Mercer have closed their dam phone lines so I can't even call them ffs - also not sure how long it takes to do t and if any fees will be incurred.

Thoughts?

A pension is about the long term, not what happens in the next five years. If you are young and in good health this should not be a problem. Best thing you can do is stop checking.

Jim2007 · 16-03-2020 4:08pm

Millionaire only not wrote: »

There good stocks , no fear of ur money

It does not matter what the stocks are, with less that than seven positions there is no diversification there, which means when an up lift comes it, may or my not be of much use to someone in that position. From day one this was an accident waiting to happen.

If the OP stills needs to get their hands on this case in the next five years, then it might still be wise to get out now, 5k down and try to increase savings.

garbanzo · 16-03-2020 10:03pm

Apollinaris wrote: »

About a year ago I switched both my wives and my own pension funds from a share based fund to a bond based fund. I was a laughing stock when I missed out on the highs of the market the end of last year. What made me switch funds was I was very concerned about the very overinflated stock prices (TESLA! and the likes) for me it looked like people and financial institutions borrowing the almost free money and then they reinvest it in the stock market, the only game in town according to everyone. Soon enough I feel I’m going to do a reverse switch, buying share based funds again. Financial advisor is an absolute joke of a job description by the way.

You have a pension fund for yourself AND both your wives. Respect !

Coil Kilcrea · 16-03-2020 10:55pm

delly wrote: »

Can you switch to cash temporarily? Ironically I started to pay into a pension this year, very small amounts, but it's already down 20%. The money I have waiting to go next month will be down as soon as it lands in their account. Pension is with Zurich.

Don’t worry Della because you’re effectively averaging in with your monthly contribution, it’s tax effective and long-term gains are assured.

Coil Kilcrea · 16-03-2020 11:16pm

A few thoughts for perspective for those with an eye on a future pension ....

Nobody could have foreseen a once in a century type of poison that seeks to kill indiscriminately.

Fear drives fire sales where every asset class gets burned. We now have panic selling that’s going to continue until we have a cure.

The markets gains in recent years have been both spectacular and unsustainable. So all of you doubting that you ‘shoulda, coulda, woulda’ now have the opportunity of a lifetime to buy great companies at bargain prices.

Timing it is impossible, but getting in is essential at prices that are cheap to ensure you get the whiplash when the vaccine is announced. That’s not an if but a when.

Extreme volatility in both directions will continue for a while.

If you’re investing in a pension, please don’t forget the tax advantage, the long time frame, the ability to average in and the fact that modest returns compounded deliver a comfortable income for retirement. And you don’t need to sell everything when you retire.

Finally, perceived wealth destruction is difficult to stomach but irrelevant if you do not need the money instantly.

Happy hunting ....

mrcheez · 17-03-2020 2:33pm

I'm down quite a lot too, but I'm looking at the upside: I'm getting shedloads of shares for the same amount of cash I was putting in last month.

patsy_mccabe · 18-03-2020 11:10pm

I tried to open a DeGiro account to buy shares a couple of weeks back just after the CV started. Passport was just out of date. Haven't got my new one yet. All shares I was thinking of buying then have fallen even more since. Beginners luck eh?
Wondering how long more to sit tight!!!!

Gman1987 · 19-03-2020 12:00am

A good few posts here are referring to pension pots down a good bit YTD and asking why they didn't see this coming and wondering what to do. Look at it at this point and time and ask yourself where do you see this going forward. I was invested in a high risk fund that is down 11.6% YTD, I'm not convinced that we are anywhere near the bottom of the stock market yet so I have decided to take any further risk out of it and swapped this over to a cash fund only this week. I'll swap this back over to a high risk fund again when I feel the time is right.

Mad_maxx · 19-03-2020 8:35am

Ger1987 wrote: »

A good few posts here are referring to pension pots down a good bit YTD and asking why they didn't see this coming and wondering what to do. Look at it at this point and time and ask yourself where do you see this going forward. I was invested in a high risk fund that is down 11.6% YTD, I'm not convinced that we are anywhere near the bottom of the stock market yet so I have decided to take any further risk out of it and swapped this over to a cash fund only this week. I'll swap this back over to a high risk fund again when I feel the time is right.

How on earth is a "high risk" fund only down 11.6% YTD?

Gman1987 · 19-03-2020 10:14am

Mad_maxx wrote: »

How on earth is a "high risk" fund only down 11.6% YTD?

Its a risk rating 4 (out of 5) managed fund with Irish Life so I'm guessing they make some wise decisions in timing exit from positions.

Mad_maxx · 19-03-2020 11:54am

Ger1987 wrote: »

Its a risk rating 4 (out of 5) managed fund with Irish Life so I'm guessing they make some wise decisions in timing exit from positions.

Irish life must have changed a lot, good to hear

Apollinaris · 19-03-2020 11:56am

Mad_maxx wrote: »

Irish life must have changed a lot, good to hear

Ha, that was exactly what I thought of! They previously managed our pension funds and they were a shower. Also to switch fund this quick during a crisis that’s impressive!

did anyone's financial advisor tip them off before the crash

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