I'm not quite sure how recent you mean my at present, but there is a return from bonds, typical euro gov bond funds are up around 5-10% this year. They look to me to be the best performing widely held funds of this year?There is little to no return in bonds at present. Bonds also fell in value earlier this year. A
Steven
www.bluewaterfp.ie
I'd forget about moving to another company, it's as likely to cost extra (especially over a company plan). If you think your company scheme is expensive you'll probably find it's a lot cheaper than an individual pension.
While the charge may be higher else where, if you are getting solid advice you could and should expect a much better return even taking your risk rating into account and the higher AMC will be worth it.
This type of investor is getting screwed by the pension companies.
Really in the final 4 or 5 years you would be better off putting the money into National Savings Bonds.
You get a guaranteed small return, no charges, no risk. But you can't get the tax relief, so you are forced to pay these companies a big slice and then hope they don't lose you even more money by picking the wrong investment vehicle.
Take this year for example, there was a fantastic opportunity for growth but it would only have happened if there was contact between advisor and client and with switching between funds.
You state they would be better of putting money into Savings Bonds but then follow that up with 'But you cant get tax relief'
Take someone paying 40% tax. They look to put money into Savings of €100. They earn €100 less tax 40% so have €60 to put into Savings. So for them to put in €100 euro into savings they actually need to earn €166 euro before tax to have a net of €100 euro.
Take someone who puts it into a Pension instead, they get the tax relief and so can actually put in the full €166 into their pension and on their pay slip they are only down net €100 euro.
So going by this someone puts 100 into savings compared to 166 into pension (same net difference on their pay as paying 40% tax) the pension in theory can lose nearly 40% and still be on level par as savings. So to say people are better off putting money into savings I do not agree.
I think we have gone off topic a bit so apologies.
But the return on National Savings Bond type vehicles is minuscule. This type of investment won’t “turbo charge” a contribution.Sorry, I may have been a bit unclear.
Obviously they are better off putting the money into a pension fund, even if they get charged 4 or 5% and then lose another 2 or 3 % in the market, because they get the 40% tax rebate.
My point is that there should be a state run vehicle for pension investments, which mimics the National Savings Bond rates, guarantees a return and allows the investor to avail of the tax rebate.
I have had this discussion with others on this issue before and I am still unable to understand why this type of option is not available.
Particularly, for those who want to turbo charge a final pension contribution in the last 4 or 5 years of their working lives.
If you only have a 5 year investment plan, then you might prefer the guaranteed 1 or 2%. Coupled with the 40% tax rebate, it makes for a very healthy return.But the return on National Savings Bond type vehicles is minuscule. This type of investment won’t “turbo charge” a contribution.
I have a quote from IPF, which has the following prediction
Monthly Contribution 1859pm from Jan 2021 to Oct 2025
Total Contributions ( 58 x 1859) = 107822
Expected Fund in October 2025 = 102858
This is with an optimistic return of 3% pa.
So I will be down 5k, even if they get 3% growth per year.
Is that a good deal?
So, as a broker, you claim that you can spot fantastic opportunities for growth IN ADVANCE and advise your clients to switch funds to avail of them, while charging a higher fee/commission for your service. Sorry but I don't believe that's possible. How many years of a track record of correctly advising your clients when to switch funds have you got?
I have a quote from IPF, which has the following prediction
Monthly Contribution 1859pm from Jan 2021 to Oct 2025
Total Contributions ( 58 x 1859) = 107822
Expected Fund in October 2025 = 102858
Just to give ADVANCE notice to anyone who is thinking of contacting me, I CANNOT spot fantastic opportunities in advance. And I won't tell you to switch funds very often either. I reckon MSCI have better ability, knowledge and expertise to design an index that represents the world stock market than I do, so I take advantage of their expertise.
Steven
www.bluewaterfp.ie
Woeful stuff.
Find someone else.
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