how do you benchmark performance of financial planner?

say your portfolio (stock, funds) returned following:
7% in 2020
-3% in 2021
-2% in 2022

a. is there any way to bench mark the financial planners so you know whether particular planner is consistent with others or whether this one performed better or worse.
Ech portfolio manager in the fund can be benchmarked based on strategy, etc. however, surely there is a way to benchmark the manager.

b. it's performance of etf a good benchmark as well?
people seem to mention vht etf.
however, etf doesn't give any dividend.

 

Also consider gains/losses both realised and unrealised in that period. Be wary of realised gains being taken if these accrued in a different period. eg CBA shares held for 15 years.

Benchmarking is the process of comparing similar options eg industry funds with similiar exposure. eg ASX, ETFs, Industry fund strategy.

 

compare to super funds for instance.

 

thanks. that's a good idea actually. i totally missed that.

if there general go to comparison site amongst all major superfunds?

 

that i dont know.... i only know how mine is doing

 

If it were my FP he definitely would be on the bench leaving his mark ......

 

First you have to define what Financial Planner "performance" is. I'd suggest their performance is based on what your initial financial goals were when you engaged them. If your goals were based on portfolio outperformance of a particular index, then sure, use that.

If a FP ever told me their value proposition was portfolio performance, I would start looking for a new FP immediately. Usually the role of the planner is far broader than that.

And yes, ETF's do pay dividends.

 

ETFs dont pay dividends. They pay distributions. A foreign (VEQ/ VEU etc) ETF can pass through distributions that are substantially just foreign income dividend income and foreign tax offsets. ETFs are generally a Managed Investment Trust (MIT). A LIC is a company form of managed trust and less common.

Distributions can be misleading due to the elements of income incl changes to costbase (AMIT tax elements)

Agree that you need to consider what the FP is tasked to do and advise. Is it longterm capital stability ? Minimal losses etc. Attempting to out perform a index benchmark which is a loss could be a enhanced capital risk. Plenty of super clients will compare balance last year to this year and completedly ignore pensions drawn, contributions and market based events.

ATO has a indepedent MySuper comparison site. Its not straight fwd. It only compares MySuper products so its cant compare FP portfolio choices and it offer only a 8 year performamnce ...Fairly limited IMO. Otherwise Canstar and other sites may give general super fund performance comparison based on 1 yr, 3 yr etc. But may not address fees based on weighted portfolio value

YourSuper comparison tool

 

I'd compare to Vanguard multisector options or industry super funds options on similar risk profile and make sure like for like after accounting for all fees and consider the super funds are after tax as well.

 

Don’t you have a financial plan that has an aim/goal - like it might be to outperform the ASX 200 by X%. That goal would be dependent on your risk tolerance and investment strategy. If your strategy is High Growth then you could compare with super returns in similar HG fund but taxation may have an impact if yours is not super.