How big does a pension need to be? That is the question, or versions of, that I am asked most frequently. I have worked in financial services for 17 years now. What I have learnt over that time and, related specifically to retirement, are two things.
At some point, someone in the marketing department of most investment firms will venture the following: “Well, we had better send our clients something to read, otherwise they will think we haven’t done anything all week. Make it sound important and it’ll justify our fees.”
Investment returns: Don’t thank me, thank the ratio
In this article, I’m going to put forward the argument that investment firms, wealth managers and fund houses are actually not doing anything particularly special. That returns are generated by a simple formula and that is the relationship between two broad assets, equities and bonds.