Standard life pension

[Holts]

I have a standard life pension fund that I have built up as self employed person utilising their Far east equity pension fund and their European equity pension fund , taken out in 1990 .

Time to sell.

They tell me though that there is no mechanism whereby a large sudden adverse market movement can be advised , consequently it is simply request sale before 5pm and sale two working days later , so instruct Monday sale takes place Wednesday thats it regardless for example of say a market crash .

I appreciate every movement can not be advised , but I am more than suprised that say a movement in excess of say 5k can not be , timing is everything but this open ended approach on such an important product seems cavalier and I am writingbto them again noting such , in the meantime , any thoughts ?

[Dod101]

I don't think that you will get very far with Standard Life but what you need is a hedge and although I know nothing about such matters I am sure someone will be able to help.

Dod

[Chrysalis]

That’s pretty normal for any fund order in my experience. The only mitigation I can think of is sell gradually, then you reduce the risk of spectacularly bad luck in timing.

[mc2fool]

They tell me though that there is no mechanism whereby a large sudden adverse market movement can be advised , consequently it is simply request sale before 5pm and sale two working days later , so instruct Monday sale takes place Wednesday thats it regardless for example of say a market crash .

Methinks your expectations are somewhat skewwhiff. Firstly, I doubt any pension platform advises clients of market movements, at least not unless you're paying scads for an advisory service under a wealth manager, and secondly, the timescales you mention are pretty much standard for OEICs/UTs (funds), which all work on forward pricing with a single daily price point.

If you want instant trades, and at a known price, then you need to switch your pension into a SIPP and buy ETFs and/or ITs instead of funds. And you could choose a broker for the SIPP that has automated stop-loss orders, so that when an investment drops by a certain amount it's automatically sold (if you really want to do that).

[gryffron]

And you could choose a broker for the SIPP that has automated stop-loss orders, so that when an investment drops by a certain amount it's automatically sold (if you really want to do that).

Though you should be aware even that still doesn't guarantee you'll get the stop-loss price.
E.g. If an investment falls from £10 to £5 overnight, and you have set a stop at £9, then you'll sell at £5 not at £9.

It does protect you against any further falls, but not an instant recovery. Beware of short price spikes triggering your stops. They should be used with great care. Hence mc2fool's reticence (which I share).

Gryff

[Holts]

Thank you all for your replies .

MC2fool ,

I do appreciate the time scales and the necessity of the forward pricing with a single daily price point , or perhaps I do not understand it fully .

Are you saying that it is impossible with the single point method of pricing for them to be able to advise of a substantial differential in price from the previous or previous but one day as the trade must take place at the time of pricing strike ? Or is it because they just do not want to be involved in the administration of such a system ?

Being flippant It is amusing to see on their statement letter "Helping you stay in control of your pension to give you the future you want "

Adding insult , If I want to hold the sale in cash I have to go into one of their money market funds as my plan does not allow me a facility to hold the cash by any other method presumably therefore incurring fund fee and spread , given they have already had a reasonable return in fees I am not warming to them !

[Dod101]

Thank you all for your replies .

MC2fool ,

I do appreciate the time scales and the necessity of the forward pricing with a single daily price point , or perhaps I do not understand it fully .

Are you saying that it is impossible with the single point method of pricing for them to be able to advise of a substantial differential in price from the previous or previous but one day as the trade must take place at the time of pricing strike ? Or is it because they just do not want to be involved in the administration of such a system ?

Being flippant It is amusing to see on their statement letter "Helping you stay in control of your pension to give you the future you want "

Adding insult , If I want to hold the sale in cash I have to go into one of their money market funds as my plan does not allow me a facility to hold the cash by any other method presumably therefore incurring fund fee and spread , given they have already had a reasonable return in fees I am not warming to them !

Presumably if you want to go into cash in one of their money market funds you will have the same problem since that is effectively what you want to do anyway. The system of forward pricing has been in place for many years and they are not going to alter their systems, even if the could, for you I am afraid. That is just the way it works. No point in getting up tight or being cynical about it.

Dod

[dealtn]

Thank you all for your replies .

By continuing to write to them aren't you simply adding to the length of time this is taking, and therefore your exposure to the risk of a sudden sell off?

The impression I got from your original post was that it was "time to sell". Have I missed something?

[mc2fool]

I do appreciate the time scales and the necessity of the forward pricing with a single daily price point , or perhaps I do not understand it fully .

Are you saying that it is impossible with the single point method of pricing for them to be able to advise of a substantial differential in price from the previous or previous but one day as the trade must take place at the time of pricing strike ?

There you go using that word again. No financial service provider is going to offer you any advice unless you have explicitly signed a contract engaging them to do so.

There are three levels of investment service; execution only, advisory and discretionary. Not all financial service providers offer all of them. Here's a description, which is from a site for folks looking for a wealth manager so you can guess which end they are aimed at, but it still applies; just substitute "pension" (or any other type of financial provider) wherever it says "wealth manager". https://www.findawealthmanager.com/knowledge/discretionary-advisory-and-execution-only-investment-management/

However, that won't actually make any difference to your question, the answer to which is, yes, it is impossible. That's the way funds (OEICs/UTs) work and is one of their disadvantages; trades are done at the next valuation point, so you don't and cannot know what price you will buy/sell at until afterwards. The pricing point is usually at 12noon, so in theory if you got your sell order in before that the proceeds could be credited to your a/c later in the afternoon, but I've never seen that happen. Your Monday for Wednesday (or later) credit example is much more the norm.

https://www.whatinvestment.co.uk/openended-funds-a-beginners-guide-2114996/
https://www.sharesmagazine.co.uk/article/why-does-it-take-so-long-to-buy-and-sell-a-fund
https://www.youinvest.co.uk/faq/how-quickly-will-my-deal-be-processed

As I said above, if you want instant trades and at a known price then you need to switch your pension into a SIPP and trade ETFs and/or ITs (and/or stocks) instead of funds ... and do so while the market is open. You'll be given a price that's good for 15 seconds, which you'll have to click to accept before the timer on the screen counts down to zero.

[Alaric]

However, that won't actually make any difference to your question, the answer to which is, yes, it is impossible. That's the way funds (OEICs/UTs) work and is one of their disadvantages; trades are done at the next valuation point, so you don't and cannot know what price you will buy/sell at until afterwards.

Go back far enough in time and I'm talking mid 1980s before the regulators came into existence and it was possible. There was the concept of the dealer's box. This was a float of units which had been sold by holders back to the Unit Trust's dealers usually by phone which could then be sold on by the dealers without waiting for the next pricing point. The practice got banned, very possibly because it could easily give special terms to a favoured group of clients.