Within the new investment feature, while there is a projection, there are no average returns specified for each risk profile. It would be nice to know that each year my money would affect roughly ‘X’ percentage to make this easier to see.
I’m not sure any company does this for investment’s as there is zero guarantee you’ll even get a return in the first place. All you can really show (does Monzo do this?) is past fund trends.
It’s my wording here, yes I meant average past trends expressed as a percentage return. Would be great to see in order to compare.
As an example that other platforms do (nutmeg as one example):
Low risk: 4%
Medium risk: 6%
High risk: 8%
The best you can do is look up the funds online and check out the annualised past performance for an indicator of how its performed “on average” over a time period.
Are we talking about average fund performance or based on fund performance here’s what you’de get?
Because the second one I don’t see the value of, personally, and it might be misleading. Who’s to say it will still perform like that in the future?
The first one I think is useful, because without guidance on what you might get back, you can make a decision based on how generally speaking the fund has performed in the past.
I mean professional platforms and pension providers always give “projections to age XX” - this is simply a forward calculation using previous annualised figures. As long as it comes with the standard caveat of “past performance is not indicative of future performance” - its a guide.
The projections also help people understand the POTENTIAL returns based on the risk. Usually projections come with a “high, medium, and low” so that you can see overall. This also demonstrates in real numbers the volatility.
Actually, I’ve since found HSBC do do this, but it’s really hidden, so maybe it might be useful to some after all. But they heavily, heavily caveat it and even use the world assumptional. So the wording would need to be on point.
The FCA regulate all of this anyway - wording is very specific to avoid “this will be worth” type assumptions by users.