Best value Self-Directed AVC PRSA for a 10-15K lump sum?

They are all more or less the same. The charging structure of standard PRSA's are laid down in legislation so they have to be the same.

For self-directed, you will be a non-standard PRSA. I use Standard Life for those as they use Stocktrade as their traders, who are relatively cheap and easy to use.


Steven
www.bluewaterfp.ie
 
Reviving this thread as it seems broadly in line with my query.

I'm in occupational scheme in work - so any additional pension would be classed as an AVC I presume. Maybe I'm getting bogged down in labels but does that give me less choice in terms of choosing a pension structure for additional contributions?

I'm currently in a Zurich PRSA AVC (through LA Brokers) which is OK at 1% AMC but the lack of transparency on fees/expenses at a fund level and my growing lack of believe in ANY fund manager / stock pickers ability to deliver anything but average returns at best has me looking at other options for my 30yr investment horizon.

My ideal structure is a super low cost self directed pension fund which holds ETF index funds with an AMC of c. 0.05%. I've become quite convinced of the benefits of indexing i.e. getting average market returns overtime and allowing them to compound while ensuring the compounding of costs don't impede the returns!

Given my circumstances i.e. already in occupational scheme - who provides something suitable for me in the Irish pension market? Whats the lowest theoretical AMC you can get down to if I held only a Vanguard S&P 500 ETF with a 0.05% AMC or iShares 500 at 0.04%?
 
Last edited:
Don't confuse the fund manager's fee with the product providers. You will still have to pay between 0.5% - 1% AMC to the company that provides the PRSA product that you invest through.


Steven
www.bluewaterfp.ie
 
SBarrett said:
Don't confuse the fund manager's fee with the product providers. You will still have to pay between 0.5% - 1% AMC to the company that provides the PRSA product that you invest through.


Steven
www.bluewaterfp.ie
Click to expand...

Thanks Steven - aware of that i.e. Davy's for example need their AMC, then the product itself Vanguard or whom ever have have a fund fee that sits on top.

My question was whether there is a self-directed pension product for an AVC contributor like me or am I forced to go get a plain vanilla PRSA AVC with the standard 1% AMC and limited fund choices i.e. all actively managed
 
There is no such product.

With the greatest respect, €15k is a trivial sum; 1% is €150.

What about just sticking with the 1% and then allocating the money to something like Zurich's International Equity fund?

Yes it may underperform or outperform depending on the particular year, but it should do fine overall. An alternative would be to go Self-Directed through a stockbroker. Going down that road, you'd probably end up paying 1% a year for the structure and then the small AMC for the ETF, but I'd be surprised if such a small amount would be accepted.
 
martin said:
Davy Select has a self-directed PRSA at 0.75% AMC, 100% allocation rate. There may be cheaper options, but I'm not aware of any. One of the funds they offer is a Vanguard S&P 500 ETF at 0.07% TER.
Click to expand...

There you go. Would they accept €15k on those terms though? €113 a year for all of that admin and risk doesn't sound plausible. Surely there's a minimum?
 
Gordon Gekko said:
There you go. Would they accept €15k on those terms though? €113 a year for all of that admin and risk doesn't sound plausible. Surely there's a minimum?
Click to expand...

Yes. I don't think there is a minimum value you need to invest, but if there is, it's definitely lower than 15k.

Everybody has to make their first pension investment at some point, and when they do, I'd imagine that the first investment often isn't very large (compared to the balance of an average PRSA that has been around for longer). Investment balances are likely to grow over time as more money is put into the account, but if a provider doesn't accept that initial investment, then I'd imagine that they're also less likely to see the larger amounts later on.
 
Last edited:
Gordon Gekko said:
There you go. Would they accept €15k on those terms though? €113 a year for all of that admin and risk doesn't sound plausible. Surely there's a minimum?
Click to expand...
I was in contact with Davy last year when I searched for a suitable PRSA for my wife and they don't have a minimum contribution. You can pause as well any time your contributions like with any other PRSA.
 
Gordon Gekko said:
There is no such product.

With the greatest respect, €15k is a trivial sum; 1% is €150.

What about just sticking with the 1% and then allocating the money to something like Zurich's International Equity fund?

Yes it may underperform or outperform depending on the particular year, but it should do fine overall. An alternative would be to go Self-Directed through a stockbroker. Going down that road, you'd probably end up paying 1% a year for the structure and then the small AMC for the ETF, but I'd be surprised if such a small amount would be accepted.
Click to expand...

Amount of initial investment is irrelevant (mine because you asked above is closer to three figures) - as others have said a pension journey is 30yrs and a pension company will happily take 15k knowing it will grow overtime - a 1% fee on a sum compounding over 30yrs turns out to be a very nice business model!

In regard to your put it into Zurich X fund and you should be grand advice. I think the evidence bears it out that vast universe of funds / fund managers / stock pickers by definition turn out to be average over time. What else could they be - for every fund that sells a share of Apple thinking it will go down there is of course a fund who buys that share of Apple thinking it will go up (all the while trading back and forth with each other trying to beat each and incurring trading fees (guess who pays for those- the investor)). My investment horizon is 30 years - lets presume the Zurich International Equity fund has a Nostradamus fund manager right now (from a brief look it doesn't its underperformed the S&P 500 / FTSE 250 fairly significantly). Lets say it did outperform however - the average fund managers tenure managing a fund is maybe 6-7yrs, over 30yrs lets count 5 maybe 6 different fund managers will manage my money at Zurich international fund - will all 5/6 be rockstar managers? Do I want or need to be checking the staff rotation at that fund. I bet some will be above, some will be below, some will be poor managers but get lucky others the opposite but over 30yrs the probabilty says they'll be average. Average all the while charging me the investor money for their incessant trading back and forth, following hunches & blind attempts to try and time the market etc. etc.
 
The S&P and FTSE aren't really relevant in terms of an international equity fund; it's the MSCI World one should be looking at.
 
Gordon Gekko said:
The S&P and FTSE aren't really relevant in terms of an international equity fund; it's the MSCI World one should be looking at.
Click to expand...

What one should be looking at is gross returns achieved minus costs.

The S&P 500 & FTSE 250 indexes have destroyed MSCI World & Zurich's Int Equity fund in terms of performance. One could argue of course that because the S&P 500 is made up of companies that derive 50% of their earnings and 50% of their profits from outside the US it is also an excellent international equity index. MSCI World itself is made up of 60% US equities with another near 7% from the UK.

If the Zurich Int Equity fund manger would like to kid himself then he can benchmark himself against the MSCI World Index but ultimately if taking his fiduciary responsibilities seriously he should be asking given the availability of passive low cost (0.05%) diversified vehicles like an S&P500 fund or FTSE 250 whether he's providing incremental value or simply ensuring the "value" is being captured by himself the fund manager and indeed the fund provider.

Given the stock market is a closed system it is self evident that for every "smart" manager/fund there has to be a "dumb" one. Indeed when you even look at these outperforming funds then turn out to be not that smart for very long. Sure they might outperform for a while and even when they do they don't outperform by very much and certainly not by enough to escape the destructive gravity of their incessant trading, errors & overheads.
 
Last edited:
Did anything further come of this?

I'm in an AVC PRSA and ALL I want to do in the world is have it self-directed through Zurich into the S&P 500 (VUSA) ETF. . . . That's it!
I don't want any other advice or other ETF's. . . I just want That. . . Is that possible? Can that be done?
 
Ted110 said:
Did anything further come of this?

I'm in an AVC PRSA and ALL I want to do in the world is have it self-directed through Zurich into the S&P 500 (VUSA) ETF. . . . That's it!
I don't want any other advice or other ETF's. . . I just want That. . . Is that possible? Can that be done?
Click to expand...

Standard Life's AVC PRSA can access [broken link removed]. Annual charge 0.9% including the AVC PRSA and the fund, or 0.65% for a transfer of >€100,000.

Regards,

Liam
www.ferga.com
 
LDFerguson said:
Standard Life's AVC PRSA can access [broken link removed]. Annual charge 0.9% including the AVC PRSA and the fund, or 0.65% for a transfer of >€100,000.

Regards,

Liam
www.ferga.com
Click to expand...

@LDFerguson
Is transferring your existing pension holdings from say a Zurich PRSA AVC fund into this Standard LIfe PRSA AVC a big job? Can you go direct to Standard Life or is this transfer product accessed through a broker
 
letitroll said:
@LDFerguson
Is transferring your existing pension holdings from say a Zurich PRSA AVC fund into this Standard LIfe PRSA AVC a big job? Can you go direct to Standard Life or is this transfer product accessed through a broker
Click to expand...

Not a big job. Application form for the Standard Life AVC PRSA, which would be similar to the one you completed previously. Written instruction to Zurich Life. Zurich Life will require confirmation from Standard Life that you have an AVC PRSA.

I'm not 100% sure what Standard Life will do if you contact them directly. As far as I know, they don't have a direct sales unit. They might refer you to a broker or they might just set up the product for you themselves. Either way, you won't benefit by going direct as they won't undercut their main source of business - brokers. In the interests of full disclosure I am a broker so my opinions on this could be perceived as biased but anything I've said can be verified easily.
 
LDFerguson said:
Either way, you won't benefit by going direct as they won't undercut their main source of business - brokers
Click to expand...
FWIW in my case, 1.25% AMC via a broker, 0.75% AMC direct to Zurich for the same product. Maybe there are cheaper brokers that would have also done it at 0.75% but I could not find one. Worth the call I think.
 
You must log in or register to reply here.
Back
Top