Spending This might be a great selling technique if you are buying clothing or socks. You don’t have to waste time trying on anything and you can get in and out of the stores in no time at all.

But does this ‘one size fits all’ approach work for your financial planning?

In some cases, having part of your money invested in a generic default index tracking fund is a good starting point for savings. These funds are generally diversified, usually much cheaper in fees and have a history of decent returns. But, is it wise to have your pension invested in a default fund?

Imagine if everyone was given a size 8 shoe to wear. It might be too big or too wide and fall off your foot or it might be too small, this is because it just wasn’t made to fit your foot. Just so, your finances are personal assets and each person has unique financial needs.

• 90% of employees are satisfied with their company’s default pension fund. 
• These funds tend to be safe low risk investments – This is great if you are nearing retirement, but what if you are just newly employed out of university? Younger investors usually follow a higher risk profile. Does your pension allow for this?
• Most people don’t know what funds they are invested in.
• Are you single or have a family? This could also affect your risk.
• Do you know if your investment is diversified? – Your pension fund or investment could be invested in local funds. What happens to your fund if they under-perform?
• Find out if your company pension allows you to choose your own funds.
• Read up on the compilation of the funds chosen for you.
• Are your funds actively managed and monitored?
• Some investors might have spare cash that could be invested into alternative funds.
• The younger generation of investors are also looking into ethical funds. (these are funds that don’t invest in e.g. fossil fuels or tobacco companies and look to sustainable industries)

If you have a company pension scheme, then it is advisable to set up a meeting with the pensions administrator to discuss your pension options. 

It is also advisable to chat to your deVere Acuma adviser about optimising your private pension plan and investments so that you are ensured of a well-diversified portfolio, especially during these volatile economic times. [email protected]

Please note, the above is for education purposes only and does not constitute advice. You should always contact your deVere Acuma adviser for a personal consultation.

* No liability can be accepted for any actions taken or refrained from being taken, as a result of reading the above.

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