Richard Hancock, analyst at IFA Investment Maze
"No matter what age group you’re in, the fund will depend on the client’s attitude to risk, their capacity for loss and the client’s requirements in general. The trick is when to de-risk." "The longer they have, the higher up the risk spectrum they should be and the more equities they should have and the higher their capacity for growth."
"For the 18-to-35 age group, they should be 100 per cent invested in equities. For the 35-to-50 age group, they should have begun to de-risk their portfolio so it is more in line with their real risk level, although this is when their earnings are at their highest."
"At 50 to 65, they should have completely sold out of equities and be fully invested in fixed interest, cash and index linkers, although I wouldn’t recommend anyone sells equities and goes into cash or gilts at the moment."
"There are some general rules; for example don’t move out of equities straight after a market crash, wait for between three and five years."
Kerry Nelson, director of Nexus IFA
"More and more people are struggling in old age now and many are waiting until they are 35 before thinking about a pension. There needs to be more education and the government needs to back private pensions." "If an 18 year old wants to retire on £20,000 a year, they would only have to put away £1,414 a year, which works out at only £94 a month. For most 18 year olds, £94 is just a night out on a Friday."
"If you leave it to 35 years old, this works out at £4,226 a year, which works out at £352 a month gross, or £281 a month net – they need to put away three times as much as an 18 year old to achieve the same income."
"At the age of 50, you will need to put away £14,000 a year, which equates to £1,168 a month gross, or £934 net. If someone at the age of 65 wants to retire on 20k a year, they need to put away a lump sum of £316,000."
"There are too many negative headlines around about people losing their money when one pension provider goes under and many people are put off by a mate in a pub telling them similar stories. Too many people bury their head in the sand and think the state will look after them, but this isn’t going to happen. They need to take control with SIPPs or a PPP."
Chris Spear, managing director of Spear Financial
"For all age groups I adopt a core and satellite approach. Having ascertained their attitude to risk, I build a portfolio often using multi-manager and multi-asset funds as the core. These funds adapt to market conditions, or if a fund manager leaves or goes off the boil, then the multi-manager can switch funds."
"This ensures the client is not left with a once-good fund. Multi-asset funds can move with market conditions – more defensive assets at present, but more risk-on assets later."
"Satellite funds will often include emerging markets or Asia. We know the story for these economies looks good for the medium- to long-term, but we would not want to commit everything to them."
"People aged 18 to 35 might have a greater proportion in these sort of funds – I like First State Global Emerging Markets Sustainability and their Asia Pacific Leaders funds, as well as the Aberdeen Emerging Markets funds. I might also use global funds in general – M&G Global Dividend or Neptune Global Equity."
"Even for someone between 35 and 50, we would adopt this process, but at those ages you are more likely to have built up a reasonable fund, so there will be less in the higher-risk areas."
"Between 50 and 65 there is a greater move to capital preservation and consolidation. This has been difficult to advise on of late. Before the current stock market unrest there had been concern about traditional lower-risk assets, such as corporate bonds and government bonds."
"In this case I looked at Strategic Bond funds, such as Fidelity Strategic Bond, where Ian Spreadbury showed he was good at capital preservation during the 2008 credit crunch and is doing the same in the current crisis."
"I keep returning to multi-asset funds for this age group – Fidelity Multi Asset Strategic, UBS Multi-Asset Income, Thames River Distribution and Invesco Perpetual Distribution. All managed by safe pairs of hands."
"It’s also worth reminding clients of the power of regular monthly investing, so-called pound-cost averaging. Mathematically it works, smoothing out some of the ups and downs associated with stock market investing."