Broker Charges on Occuptional Pension Scheme

N

NoraGla

Guest
Hi

I was wondering if someone can help me regarding charges on an occupational pension scheme (circa 20 members).

Our brokers have an all in fee for administration on the scheme - €5k for the year and then charge us on top of this for 'consultancy' work, which includes taking emails and phone calls, updating our pension booklet, etc - for which they charge around €200 per hour.

Is this about right ?

Thanks
 
Firstly: Disclosure - I am a financial Advisor, I am answering your question based on what I understand to be general practises in the Pensions Industry.

Secondly: Information below is my opinion based on the little information you have provided. Before making any decisions on what you want to do, I would strongly advise clarifying exactly what the charges cover and the specifics of the charges.

Really, there is not enough information for you to get a definitive answer. Without having a breakdown of fees (ie what exactly they cover) and amount of hours of calls made, it is difficult to give you a straight answer.

I dont think it would be unreasonable for you to be able to negotiate an annual Fee (inclusive of consultancy work) with your broker, but again Its not clear from your post as to exactly the work your broker does.

One of the most important things I would point out is the clarification of the All in fees - are they inclusive of Pension Providers charge or are they simply the brokers all in fees.

I suppose the questions I would have are:

1) Are you happy with the service you get off them ?
That is, are they professional, quick to reply, clear etc. Are you happy paying €200 for this service.

2) Have you tried negotiating a better deal off them?
Did you ask them for the option of Execution only (ie no advice given Pensions just setup and administered basically) or request an all inclusive fee?

3) Is the Admin fee the comissions paid?
Or was this the total admin charges on the scheme. Are there Life office fees on top of this (management fee, allocation rate, policy fee)? What does the broker do for this fee? How long do they work on the administration side of the scheme to justify the fee?

4) Are the brokers trustees of the scheme?
This would add to the expense of Administering a scheme


Some brokerages charge a fee (that you generally agree upon from the start) and some charge Comissions (some charge both which can depend upon the work they actually do).

Personally I have heard of Brokers (or financial advisors) asking for between €150 - €200 per hour for consultancy work which is reasonable in comparable to similar financial professions. That said the question of whether or not this should be included in the Annual Administration fee is for you to discuss with your broker.

So, in summary I cant really give you a definitive answer as it really depends on how happy you are with your brokers and what exactly they are doing for the fees.

So in Summary:

1) Get clarification or breakdown of what exactly the administration fee entails. To charge an administration fee and a consultancy fee is only excessive depending on what role the broker is actually playing in the schemes administration. Does the administration fee include all Life office charges , if not then you are not disclosing all fees incurred. What is the allocation rate of your premiums?

2) Try Negotiate better charges with your brokers. Depending on the size of the scheme (Annual premium paid) there maybe alot of room to manoevre, particularly to negotiate with the Life Office administering the scheme.

3) If you are not satisfied after all of this then consider contacting other brokers (who offer the same service) to see if you can get a better deal.
 
Thanks for your help here - I'm have requested more information from the guys to see can I get a better understanding of what exactly they are charging us and what's included and not included in our admin fee.
 
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