Hi SBarrett - No disrespect but are you reading the last few threads?
This packaging of a tracker inside a lifeco product is facilitating brokers getting paid on the double.
The lifeco pays 5% commission (disclosed) and the tracker provider pays another 3% "on the quiet". When the tracker brochures says "available as an ARF or personal pension"- Happy days - 8% commission!!!
Must be time for RDR!!!
I haven't seen any ARF product offering 8% even with a tracker wrapped in an ARF. Maybe it's because I haven't been looking in the murky places.
Look I have written enough posts on AAM as to how the public have being ripped off by the Investment Community. The entire thing is an absolute scandal. Top, Middle and Bottom. I could write a book on how I've been ripped off.
It really does boil down to the fact that people working on commission earnings in Ireland are going to rip you off -- simple as that. The law in this country is scandalous. It makes it easy for the Financial Providers to empty the pockets of the average Joe and get away with it.
I agree with you to a degree. The financial world works in percentages. Add to that, insurance companies pay an insane amount of commission to get the business. For example, a €500,000 ARF can result in €20,000 in commission. There is no way that an advisor is going to do that amount of work but is he going to turn it away?
On the fee side, a retirement takes a hell of a lot of work. Is a client prepared to pay €8,000 in fees when there is the option of letting the adviser get €15,000 and they get an additional €5,000 added to their pot?
On the consumer side, I have lost count of the amount of times that people have asked me to do work for them and then refused to pay for it. It takes a lot of time to do this work, why should payment be a commission at the end of it? But that is what a lot of people think. If I do nothing it's free work, if I buy something they get paid. And guess what? The adviser always finds something that they need to buy!
That is why since setting up my own company, I am fee based. If you come to me for advice, I will charge you for it. That way, I can give you independent advice. If I believe a product is the best way to solve your problem, I will recommend it and reduce/ offset the fee. Everyone knows where they stand that way.
Steven
http://www.bluewaterfp.ie