Existing managed funds - worth moving for lower AMC?

Eagle Star Matrix funds, at least ten years old.

100k initial lodgement.

101% allocation, used a discount broker who added their 3.5% commission.

So 104,500 into eight funds on day 1.

AMC is 1%.

Paid 41% tax on growth at 8th year maybe 2-3 years ago, 150k approx, back to 130k approx.

Now worth maybe 140k.

1,400 charge per annum seems a lot.

Is there any use in shopping around?

Any assurer offering close to 0.5% AMC?

Owner is 70+ and will never need the funds.

In short, yes there are lower cost options out there and as the investment is in positive value post paying the Exit Tax, there is no tax reason not to consider a lower cost option. It is good to hear that the owner wont need the funds but any professional adviser will need much more information on the owner's situation, objectives and investment risk tolerances/appetite etc before they could make a recommendation on 'suitability' for the client. Again this isn't a reason not to consider lower cost alternatives, just a heads up re what to expect. I suggest phone a couple of firms and they will be able to give you a feel for what is available and the owner can then decide if it makes sense to move before committing to the required paperwork.

My parents are married, age 72, retired.

Main PS pension = 35k approx
ARF annual 5% pension drawdown 3.5k gross
Other self-employed income = 3k
Spouse OAP = 6k

Overall income = 45-50k
They save out of this income, at least 750 pm.

Financial assets = 500k approx, as follows:

140k Zurich matrix funds
70k approx ARF

300k approx on deposit

They have 2x medical cards, 2x travel passes, subsidised electricity, free TV licence.

They know little about these Matrix funds, and definitely don't know that they pay 1,400 pa charges.

Maybe better to see if Zurich have any lower AMC funds?

I'll do that first, anyways.

That would avoid closing funds and starting a new policy.


Trying to find AMCs on the Zurich website now, impossible, can't see them anywhere.

Pretty sure the lowest AMC is 1% on any of the zurich funds (I have some myself) and as those type of managed funds go they are on the better value end as far as I am aware - unless you go into investing directly yourself or ETFs etc. which is much more cost effective

Zurich do have lower cost contracts but to avail of them you have to close the existing one and open a new one. That will trigger a tax liability and the new plan will start from October 2018.

If the 70+ year old doesn't need the money, why not leave it in cash with no investment risk so they don't have to worry about the markets? Or gifting it so it doesn't become part of their assets if assessed for nursing home fees in the future?


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)