Our portfolio monitoring system allows us to track the performance of our clients’ actual portfolios. We compare our average return after fees against the estimated returns of the average NZ pension fund or balanced unit trust before fees. The estimated return of this benchmark is calculated by assuming that the average pension fund does as well as each benchmark weighted 40% bonds, 10% property and 50% shares. However readers should note that most pension funds, fund managers, financial advisors and stock brokers underperform the benchmark in every asset class. We have performed well over the medium and long term despite our numbers being after fees and the estimated average pension fund returns being before fees.
Our asset allocation is similar to that of the average pension fund however we are slightly overweight NZ shares and underweight global bonds so that when, as has happened in the last few years, international stocks outperform we tend to underperform slightly. We are pleased with our performance but caution that historic returns aren’t necessarily indicative of future returns. Low fees however are indicative of relative returns.
These are actual results with clients money not model portfolios unrepresentative of actual advice.
PAM returns are after all fees. The Average Pension Fund is a composite measure of returns from NZ Government stock (30%), global bonds (10%), property (10%), NZ equities (15%), global equities (35%). These weightings approximate those used by the average pension fund. Although we haven’t included ongoing management and monitoring fees for the calculation of the average pension fund return we estimate that these fees approximate 2% - 3% pa for comparable financial planning firms to ourselves.
Please contact us for more information.