Is this a good investment vehicle for old employment PRSA?

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Byzantium

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I have apps 50K to invest from old employers prsa. pension provider has suggested a water infrastructure funds / alternative energy and good body smaller companies -equities - AMC is .95 and the provider charges a .25% service fee - works out at 1.15% pa. 100% of funds invested. Risk level is 6/7. Annualised returns come in at apps 12% - Is this good?


What should I ask? many thanks for feedback
 
Byzantium said:
I have apps 50K to invest from old employers prsa. pension provider has suggested a water infrastructure funds / alternative energy and good body smaller companies -equities - AMC is .95 and the provider charges a .25% service fee - works out at 1.15% pa. 100% of funds invested. Risk level is 6/7. Annualised returns come in at apps 12% - Is this good?


What should I ask? many thanks for feedback
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Why do you think that water and alternative energy are a good investment right now? If you answer that, you'll likely have your answer.
 
Byzantium said:
pension provider has suggested a water infrastructure funds / alternative energy and good body smaller companies -equities
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What sort of "pension provider" is this?
Byzantium said:
What should I ask?
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Why these specific recommendations?
What are the pros/cons risks/rewards?
Why not something more diversified and low cost like an index tracker?
Byzantium said:
Annualised returns come in at apps 12% - Is this good?
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Not bad but it's no guide to future returns.
Byzantium said:
AMC is .95 and the provider charges a .25% service fee - works out at 1.15% pa.
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That's not great in my opinion.
My (mainly index tracking) pension funds run from 0.45% to 0.67% - those charges may be difficult to obtain but, in my opinion, you should definitely be aiming for something c. 0.75% (all things being equal - in particular the underlying investment being appropriate).
 
Is the PRSA with the same product provider (pension company) at the moment?

Or, are you moving it to a different pension provider?


Gerard

www.prsa.ie
 
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Byzantium said:
I have apps 50K to invest from old employers prsa. pension provider has suggested a water infrastructure funds / alternative energy and good body smaller companies -equities - AMC is .95 and the provider charges a .25% service fee - works out at 1.15% pa. 100% of funds invested. Risk level is 6/7. Annualised returns come in at apps 12% - Is this good?


What should I ask? many thanks for feedback
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Sounds like utterly shocking nonsense. Run a mile, from both this suggestion and the fool or crook (or both) who has suggested it.
 
All PRSA transfers have to get 100% allocation.

Providers can pay intermediaries for transfers and recoup the payment via the AMC.

My knowledge of NI is limited as I never had any dealings with them.

Really don't know what to say about the water / alt. energy funds except that they seem a bit 'exotic'. Did you ask for a really broad diversification? I'd imagine the Other Ongoing Costs for these funds is high (circa 0.50% pa).

We're not privy to the exchange between you and the advisor and how you ended up being recommended these two/three funds from another provider, instead perhaps or changing the funds on the existing one. What are the charges on the Aviva pension/prsa?
 
You are going into niche funds, which therefore means more risk. Water and Alts have been volatile. Smaller companies are traditionally supposed to do better than large cap but haven't performed as well because of the large tech companies. So you are paying more for more risk but getting a lower return than a global index.

What would concern me more is that someone sold this to you with an annualised return of 12% per annum. I would never tell someone to expect a return of that high because it is not sustainable. 6% is the highest you can expect, you may get more depending on the time frame and market conditions but for someone to sell that to you as an expected return is dangerous.

Steven
www.bluewaterfp.ie


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This is the risk v returns over the last 10 years. I have taken the smaller companies out as the fund is only 8 years old. the numbers weren't great anyway. In the last 10 years, you got a much higher return from a global index from much less risk and lower cost.

I know where I'd prefer to have my money...

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Thanks all, I have decided to transfer it over to my self direct Davy PRSA. I have had good returns from my existing PRSA with Davy and like the access to stocks. Will need to do certificate of benefit (appx 800eu) but it's worth it.
 
Byzantium said:
Thanks all, I have decided to transfer it over to my self direct Davy PRSA. I have had good returns from my existing PRSA with Davy and like the access to stocks. Will need to do certificate of benefit (appx 800eu) but it's worth it.
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Aren't Davy hiking up their PRSA fees from May?
 
It might be worth looking at a Pension Retirement Bond, as an alternative, if you are moving it.
 
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