AVC Cornmarket - Execution only

R

ro1194

New Member
Messages
4
AVC Cornmarket - Execution only

Hi all,

32yo working in the Civil Service the past 18 months.

Im looking to set up AVC, Ive seen a lot of negativity around Cornmarket but just wanted to share what I have found and would love any advice on whether its a good option.

Initially went to set up a consultation but seen a load of stuff saying they just try to sell these basic funds:

Public Sector Cautious, Public Sector Balanced and Public Sector Adventurous which ive heard have very mediocre returns. On top of that a €595 charge for setup which ia taken out over first year.

Im now exploring a Execution Only option which is a €100 flat fee for setup but seems to widen the amount of fund options available (All through Irish Life).

As I have 34 years until retirement, I am thinking of going for something like 100% allocation into one of the following.

Indexed Developed World Equities

Indexed Ethical Global Equity

Indexed World Equity Fund

Most of which seem to have a 1% AMC but allocation from contributions are 100%. Obviously more risk with these funds but given my age It seems to be the general advice to go more aggressive early on and its something I can reevaluate later on and change as I approach retirement.

Has anyone gone the execution only route with Cornmarket? Any advice or gotchas appreciated.
 
Cornmarket are fine - they are owned by Irish Life so might be worth ringing a few other places to get an idea if this is standard rate.
Don't discount providers other than Irish Life, New Ireland and Zurich also have many good performing funds.
 
€100 set up fee is nothing. 1% amc is standard. Remember, that Cornmarket are also the chosen AVC provider of a lot of public service departments so you can do your AVCs through payroll and get tax relief at source. If you do it yourself, that includes claiming your tax relief. That's not an issue for some, it it for others.
 
MortgageBroker said:
AMC is something that can destroy a big lump of savings. This article is a well known one and it shows how a 1% management fee (that doesn't seem like much) can make a 17% difference over time
Click to expand...
All the more reason to try to get the lowest possible AMC from the outset.
Dave Vanian said:
You can get an execution only AVC PRSA with annual charge lower than 1% and no setup fee.
Click to expand...
 
MortgageBroker said:
Steven is right, the thing you should remember is that AMC is something that can destroy a big lump of savings.
Click to expand...

Somebody on AAM made the point to me: AMC dominates all other fees.

In the past I may have focussed too much on allocation rates, monthly policy fees, etc.

But these are much less significant than moving from 1.00% to 0.75% AMC, or even lower.
 
Am I right in saying only cornmarket can deduct the contributions at source? Im not staying in choosing convenience over fees but its only worth exploring other options IMO if they are better than cornmarket.
 
Yes, typically PS employers allow just one broker to do payroll deduction for AVCs.

This gives them an advantage, which obviously they exploit by charging higher fees.


If you plan to save €350 pm or more, there are AVCs available with 0.70% AMC:

  • Regular Contribution - Minimum €350 per month
  • Minimum Term to Normal Retirement Age is 5 Years
  • 100% Allocation
  • Blackrock Developed World Equity Index Fund (Article 6)
  • AMC is 0.70% on 8 Passive Index Funds (Multi-Asset Funds AMC is 0.75%)
  • Intermediary remuneration included in AMC pricing

Products | Execution-Only.ie

www.execution-only.ie www.execution-only.ie
 
Where I work it seems you can make AVCs through Cornmarket or Irish Pensions and Finance and get deductions including tax relief from payroll.

There are different philosophies on AVC fees depending on who you talk to:

1. Just start making AVCs.
These are likely people with good sized retirement funds, maybe already retired and their nest is already made, or brokers who don't want you thinking too much about fees.

2. Yes you need to start making AVCs but...
While you're at it why not spend a bit of time choosing an AVC provider with lower fees and charges so you can build a bigger retirement fund in the long term.

At your age you have time so can afford to not get a better deal and choose a more convenient arrangement. The alternative to Cornmarket, IPF is setting up a direct debit and doing a tax return every year.

You can decide that's far too much work or see it as an opportunity to build a bigger pension fund and learn more about how much taxes you are paying. It could be a good financial education in my opinion.
 
CharlieMac said:
The alternative to Cornmarket, IPF is setting up a direct debit and doing a tax return every year.
Click to expand...
That's not the only option according to this...
Saturn said:
After you take out the AVC you will get a form from the broker/provider. You will need to provide this to Revenue for your tax relief in any event . You can get the contribution coded into your annual tax credits and it is then applied to your salary. So your net fortnightly pay should be the same as if you were doing it by salary deduction. You do this yourself via MyAccount.
Click to expand...
 
Thanks for the replies, seems like its worth shopping around so.

Can I ask, if I decide to to go not go cornmarket route, how do I get tax relief on my contributions? Is it like lump sum after I do tax returns?
 
Last edited:
One way is to claim the tax relief annually in your normal Form 12 income tax return.

Probably more preferable is to upload the documents to Revenue, and have the tax relief "coded-in", so as to get the tax relief monthly.
 
ro1194 said:
Im not staying in choosing convenience over fees but its only worth exploring other options IMO if they are better than cornmarket.
Click to expand...
What price would you put on having to upload a file to revenue.ie once a year? €50k?
 
Fortune said:
What price would you put on having to upload a file to revenue.ie once a year? €50k?
Click to expand...
As I said Im not choosing convenience, id be quite happy to do it that way as long as it is for a better fee, which I now know is very achievable through other providers
 
You must log in or register to reply here.
Back
Top