What to do...My long term savings plan is underperforming

Hi all, Just looking for some advice.
I have a long term savings plan (managed fund) with Acorn Life, into which I have been putting approx €100 / month.

The plan is performing badly and I am currently €200 down (i.e. premiums paid over 5 years = €6120 and the current surrender value is €5900). The reason given for underperformance was Sept 11...

I am seriously thinking of pulling out of this plan and taking the surrender value. My reason is, in addition to bad performance so far (and I dont have any great optimism that the next 5 few years will bring great changes) things are currently very tight for me financially. I am just about scraping by monthly and in addition will have to spend some money on my car and home over the next year.

Question is, should I pull out of this plan and use some of the money (approx €1000) for upcoming expenses, or should I hold though and bear with it for the next 5 years, hoping for big improvements.

I also have an SSIA with canada life and am putting the max into this. I would intend continuing to add to this after the 5 years, so I feel I would not be doing anything too damaging by pulling out of the AL plan..

Thanks for any help...

Hi johnnycash and welcome to AAM

You might want to have a look at this thread and this thread.

Part of the poor performance could indeed to due to 9/11, but that really depends on what markets the fund has invested in. 9/11 seems to be a favourite excuse from Acorn Life when asked why your fund has underperformed.

If you are finding things tough financially at the moment, it doesn't really make sense to keep putting money into this fund (especially when you are already contributing to a SSIA), unless you can cut back on other forms of discretionary spending.

If you feel that you can get better value elsewhere (people seem to have a poor opinion of Acorn Life's charging structure), you should move your money. Browse this thread for some suggections. I don't like to keep promoting them, but Quinn Life have a low charging structure for what are essentially index tracking funds, not exciting, but at least you're investment is not being eroded by higher annual fees, bid/offer spreads etc.

For what it's worth, I would ask Acorn Life to reconcile the amount you have contributed with the amount that has been allocated, and work out how much you have paid in charges over the last 5 years.

Remember, past performance is no guide to the future, so you may be better off in the long run, however from what I have read about Acorn Life, I wouldn't be so sure..........

Acorn were notorious for high fees in the past - What fees (bid/offer spread, allocation rate, admin/mgmt fees) are you paying on this fund?

I have no idea what fees I am paying (!).

I asked about the charges when I met the AL rep last week and he told me that all charges were paid in the first 8 months of the policy, and none after that.

From reading the threads referenced above (thanks for that CCOVICH), I guess that there are other fees and charges that I just don't know about.

I have to say I went into this without knowing much about it. I asked a few times about fees and charges at that time got repeated vague answers, so I was never entirely sure. I was a complete newcomer to all this at the time, and am only beginning to become aware of these things now (...I accept it was my responsibility to check the terms and conditions..).
Anyway, given that, while I was'nt expecting to be making much on the policy after 5 years, I was'nt expecting to be down money either. While there probably will be a better performance over the next 5 years, I'm not entirely sure that it will be worth it.

My thinking now is to cash in the policy, take €1000 for upcoming expenses, keep the few grand left in an seperate account where I can dip into it for rainy day purposes, and then continue to save long term on top of my SSIA policy.

All of your contributions for the first 8 months could have gone on fees and charges. That could explain a lot.

My thinking now is to cash in the policy, take €1000 for upcoming expenses, keep the few grand left in an seperate account where I can dip into it for rainy day purposes, and then continue to save long term on top of my SSIA policy.

Click to expand...

Makes sense to me.

Ask them to confirm the fees in writing. If you dig out a copy of the original proposal document, the fees will be detailed there.

Acorn Life have moved in accross the road from our office in our business park and they have called in trying to make appointments to see if any staff want pensions, policies, etc. Very slick sales men.

Also, at home the other night, I got a knock from a cold caller doing a "survey" on pensions/investments/etc for Acorn Life.

I told her I was in the market for a pension but that I had very bad rcomments in respect of Acorn Life, ie high commissions, allocations etc. (But did not say from where)

She did not know what to say!! and said that they were recommended by Eddie Hobbs. Does anyone know are they? Why would Eddie Hobbs recommend products with such high charges.

She said " I would always go by what Eddie Hobbs says" and I just said "would you, well I would'nt."

Like good old cape verde..

An island in the middle of nowhere with sun on it.

Id wonder how independent the advise given is...

I love it......
Acorn Life .....the Cape Verde of the Pension/Investment world.

Acorn Life came out well in an Eddie Hobbs survey some time back, but that is quite different from saying that they were recommended by Eddie.

All charges taken in first 8mths, there were probably a lot of charges taken in first 8 mths but can't believe there is no ongoing charge.

The effect of 9/11 on low charging regular premium savings has perversely meant that these polices have done well. Units were bought very low around 9/11 as the fund was building up. So to say 9/11 caused underperformance is untrue, the opposite is the case at this point in time.

Get out of the Acorn savings plan no point throwing good money after bad.

Sorry to say that my experiences with Acorn Life have been just as bad..... after 8 yrs of contributions I am down money (adjusting for inflation makes its worse).

I have had numerous letter & email exchanges with them requesting what they have been doing with my money . I have had 2 different letters advising of 2 different fee structures.

I have not received any adequate explanation at all from them & I am being stonewalled at this stage - I have more or less become somewhat af an annoyance to them. All I want is an explanation (for which I am entitled to!). Their last (rather stern) letter to me advised me to take it up with the Financial Ombudsman. I am not done with it of course......but at this stage I feel it appropriate to advise others who ....

1. Are considering taking up a an Investment policy with them - to examine carefully & compare to others
2. Who have policies - to obtain details of what the current policy values is relative to what they put in

The plan is performing badly and I am currently €200 down (i.e. premiums paid over 5 years = €6120 and the current surrender value is €5900). The reason given for underperformance was Sept 11...

Blaming 9/11 is a joke, a pathetic fiction. S&P 500 dropped hard in the days after the attacks before rebounding to end 2001 comfortably higher than the pre 9/11 levels. Is currently trading over 30% higher than pre-9/11 levels and over 50% higher than the nadir reached in the immediate aftermath.

just an update on my case, after alot of correspondance i got no satisfaction, they were passing the buck on to the rep who sold me the policy and that it was in the fine print for me to read....and everything they did was above board....

My long term (Acorn Life) savings plan is underperforming

charttrader said:

[I[/I]
Blaming 9/11 is a joke, a pathetic fiction. S&P 500 dropped hard in the days after the attacks before rebounding to end 2001 comfortably higher than the pre 9/11 levels. Is currently trading over 30% higher than pre-9/11 levels and over 50% higher than the nadir reached in the immediate aftermath.

Click to expand...

In full agreement with you charttrader..... I likewise provided similar stats to them.

A few years back when the fund was not performing, I was advised by their agent that the fund was bad as a result of 911 but that it would pull back up....
Now at that time..just a couple of years after 911, that made perfect sense..... the issue I have though is that the markets have been performing well for the last number of years...therfore I would have expect the fund to do so as well.
However I was told lately by Acorn Life no that the fund does not track indices etc etc so as such Acorn gave (what seemed like) a valid reason for underperformance at the time - However now Acorn Life's arguements just don't stack up!

Let this serve a a clear warning to others.

There have been many posts throughout AAM over the years warning about their fees... let this be another one with regard to the TOTAL lack of transparancy & inqdequate explanations with what they do with your money.

ninsaga

I think you answered the question yourself(ie no optimism about further growth and you need the money at moment). With interest rates rising allowing you to get increasingly higher returns by keeping money on deposit(and with no risk) decision seems simple to me.

Hasn any one more recent experience of Acorn Life, either working/selling for them or other

Hi Exclaim,

I would also be interested to hear of people's more recent experiences. A lot of the threads are to do with SSIAs and savings plans only. I have critical illness cover and mortgage protection insurance so would be interested to hear views on these products also. Have people had bad experiences with these products as well? Haven't had to make a claim (thank goodness!) so have nothing to go by as of yet..

Thank you.