Executive Pension pot transfer
- Thread starter NotMyRealName
- Start date
I think they would be able to do better than .75 for the amc. I’d no where year as big a pot and managed better. If you do the maths on the difference it will make overall to your end funds you’ll find you could buy a nice car with the difference.
Maybe suggest you them that you’ve seen .5 in the market and want to know how they can do better before you switch? Either way well done so far!!
What does AMC really mean?
If the AMC is 0.5% and I'm tracking the S&P and the S&P returns 10% in a given period and there is no tracking error, does that mean that the net return on my investment after all charges is 9.5% (assuming 100% allocation)?
Or, are there additional charges? Otherwise put, what is included in the 0.5% AMC?
If the AMC is 0.5% and I'm tracking the S&P and the S&P returns 10% in a given period and there is no tracking error, does that mean that the net return on my investment after all charges is 9.5% (assuming 100% allocation)?
Or, are there additional charges? Otherwise put, what is included in the 0.5% AMC?
NotMyRealName
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Thanks for your encouraging input. They've drawn an iron curtain @ .75% AMC. I want to move as I feel I've been shoddily treated notwithstanding my inattention to this.
Big40 did you engage a broker to get you to .55% ?
I'm ready to move.
Kinda, it was the same “broker” that we always used but he could not answer a lot of my questions so started just to copy his contact in friends first on the mails so they would answer them directly.
Whole process was very frustrating and in the end we stayed with FF/Aviva but “had to” open new funds as some of the old funds were subject to transfer value loss (what could be moved without costing money was and the rest will shift later this year). I was annoyed about this as I viewed it as churning the accounts for fees and commissions but in the end with the funds 100% allocations and lower amc it was to my benefit.
I’d be hard pushed to recommend the people I deal with mostly because the whole thing was a mystery wrapped in shanaangans
NotMyRealName
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Thanks for that
NotMyRealName
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That's a great result, well done! It's always worth trying
Kevin,
In your professional opinion can I do better than .75%AMC ?
Providers fees etc are not really transparent across the board.
My motivation to move is historic shoddy treatment and not losing future value to ongoing charges.
NotMyRealName
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Kevin,
In your professional opinion can I do better than .75%AMC ?
Providers fees etc are not really transparent across the board.
My motivation to move is historic shoddy treatment and not losing future value to ongoing charges.
In your professional opinion can I do better than .75%AMC ?
Providers fees etc are not really transparent across the board.
My motivation to move is historic shoddy treatment and not losing future value to ongoing charges.
Well, yes you can get lower platform fees than 0.75% as per the earlier thread re: Aviva but they're not unique to them.
I called your effort a great result because the new charging structure does represent a significant cost reduction from your original terms and it was offered (at least from my understanding of what you posted) without any hassle and without any of the usual sneaky clauses that get inserted into re-written cases.
As you've been with this provider for a reasonable period time, it can be a difficult undertaking to actually move since you're moving from the familiar to the unfamiliar. Better the devil you know and all that....
Shoddy treatment is a different matter though.
kevin
www.thepensionstore.ie
I called your effort a great result because the new charging structure does represent a significant cost reduction from your original terms and it was offered (at least from my understanding of what you posted) without any hassle and without any of the usual sneaky clauses that get inserted into re-written cases.
As you've been with this provider for a reasonable period time, it can be a difficult undertaking to actually move since you're moving from the familiar to the unfamiliar. Better the devil you know and all that....
Shoddy treatment is a different matter though.
kevin
www.thepensionstore.ie
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NotMyRealName
Registered User
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Kevin,
In a nutshell, what I'm after is,
* 100% allocation, a better AMC than .75% ( I'm hoping this would include trail fees etc.) . No sneaky exit charges ( not because I want to tinker, but in case of death, serious illness and when it comes to lump sum /ARF time.
It's a 3 year timeframe, and additional contributions are planned.
I've considered the devil I know and that was why I tried the advised negotiation. By my rough calcs ,assuming 5% -ish p.a. growth and inc. projected contributions the difference between (.75% and .55% could be approx 6k in 3 years. My crude calcs can be wrong .......and have been.If better terms are available from a devil I've not yet met, well then I'm ready to make that move.
Anyway, I post this so , hopefully, others can learn from my experiences ( which haven't been as bad as some other peoples) , not because I'm looking for pension advice for free.
My STRONG advice to any readers here is review your particular arrangement. The earlier in your contributing phase, the better.
If you can't, or don't want to, understand it........Look for professional help.
" The best time to have done something is then.......the next best time is Now."
In a nutshell, what I'm after is,
* 100% allocation, a better AMC than .75% ( I'm hoping this would include trail fees etc.) . No sneaky exit charges ( not because I want to tinker, but in case of death, serious illness and when it comes to lump sum /ARF time.
It's a 3 year timeframe, and additional contributions are planned.
I've considered the devil I know and that was why I tried the advised negotiation. By my rough calcs ,assuming 5% -ish p.a. growth and inc. projected contributions the difference between (.75% and .55% could be approx 6k in 3 years. My crude calcs can be wrong .......and have been.If better terms are available from a devil I've not yet met, well then I'm ready to make that move.
Anyway, I post this so , hopefully, others can learn from my experiences ( which haven't been as bad as some other peoples) , not because I'm looking for pension advice for free.
My STRONG advice to any readers here is review your particular arrangement. The earlier in your contributing phase, the better.
If you can't, or don't want to, understand it........Look for professional help.
" The best time to have done something is then.......the next best time is Now."
Can one of the financial experts confirm/clarify this please?
Yes, the difference between the gross return and net return would be the management charge in this case. However, funds may also have associated running costs that are not included in the quoted AMC figure. This represents the total expense ratio (TER) of the fund and these figures can be much more difficult to obtain.
kevin
www.thepensionstore.ie
As per earlier, charges are one part of the equation (albeit important) because it ultimately comes down to the overall value you're getting; all things considered. But, Yes, there are different pricing options on the market that effectively operate on the basis of a volume discount above certain thresholds. €600,000 would qualify.
kevin
www.thepensionstore.ie
Thanks Kevin,
So a fund of an Irish company tracking a major index, what is the TER likely to be if the AMC is 0.5%?
Otherwise put, what is included in the AMC and what is not?
Note: I don't think that this is a simple question - well, maybe the question is simple but the answer isn't coz I have seen others ask it before on this site and I'm not conscious of it ever receiving a decent answer! Long way of saying that I appreciate very much you taking the time to reply!
So a fund of an Irish company tracking a major index, what is the TER likely to be if the AMC is 0.5%?
Otherwise put, what is included in the AMC and what is not?
Note: I don't think that this is a simple question - well, maybe the question is simple but the answer isn't coz I have seen others ask it before on this site and I'm not conscious of it ever receiving a decent answer! Long way of saying that I appreciate very much you taking the time to reply!
Gordon Gekko
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I like taking exit penalties if it gives me extra allocation and a lower AMC.
As I’m not going to move, it’s a win-win
As I’m not going to move, it’s a win-win
The TER is more prevalent with managed funds as opposed to index tracking funds. Some actively managed funds would have very high TER’s as it relates to the ongoing management activity undertaken by the team.
TER’s tend to be historical in nature and only used (when you can get them) to give an estimation of the likely costs that will be incurred by the fund in the future. But sub-funds within a branded range of multi-asset funds could also have different TER’s as a reflection of the different asset weightings that each one has.
Some well-known multi-asset funds on the market here have a base AMC of 1% but the TER could be anywhere from an additional 0.1% to an additional 0.45%. Focussed managed funds can have ongoing transaction costs that are even higher again.
In summary, it is essentially the total cost of all the administration and third party charges borne by the investment manager over a given period of time which will include the stated AMC. This is ultimately passed on to the individual investor so it is in addition to the AMC as opposed to being a fixed percentage of it.
kevin
www.thepensionstore.ie
It can be broadly broken down as business costs vs activity costs.
The AMC covers the cost of operations to the firm which would include everything from hiring the individual asset managers, investment analysts, support teams, admin and back office, marketing, legal, compliance, reporting, audit and regulatory fees etc…as well as the everyday costs associated with running a business e.g. light & heat, computer systems, networks, software packages, rent, rates, tax, salaries, pensions, benefits etc…the list goes on.
There would also be a built in profit margin for the firm and sufficient margins to pay commissions and other fees/remunerations to intermediaries.
The TER would account for the other costs associated with the actual investment activity itself i.e. transaction fees on acquisition or disposal of assets (usually the biggest component), hedging costs, option costs, external analysts/advisors, company research, market research, third party performance fees, incentive payments and/or bonuses based on achieving certain benchmarks.
The base AMC on any given fund will usually remain relatively consistent over time while the TER is variable and more heavily influenced by a multitude of external factors.
kevin
www.thepensionstore.ie
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