Fixed fee Pension platform

F

FarmFly

Registered User
Messages
9
Is there a fixed fee pension platform available rather than a platform that charges a percentage? I hope to increase my pension substantially over the next few years, and the percentage fee structure will get quite costly.
 
For a PRSA this is not possible. It could in theory happen for other vehicles and you could negotiate a fixed fee. However you’d have to have a substantial pot to get a preferred rate like that. A lot of providers don’t make money on policies until they grow to a certain level so you’d need a substantial pot to get special treatment.

As far as I am aware all providers charge a percentage of funds as their standard fee.

it’s best to talk to the providers and explain your case to see if you can get a fixed fee. Bare in mind that I’d imagine none of the life companies will entertain this as it’s too messy for them so you are then in the self administered world.
 
Thanks for the reply.

I am hoping to move from a managed private pension to a simpler blend of indexed funds, and reduce fees. The pension is substantial and will become very substantial over the next few years. The company I am a director of has substantial funds that I want to move across into my own pension.
 

The closest thing to it would be a Self-Adminstered Scheme with a fixed fee plus an Execution Only stockbroking account to hold ETFs.
 
Gordon Gekko said:
The closest thing to it would be a Self-Adminstered Scheme with a fixed fee plus an Execution Only stockbroking account to hold ETFs.
Click to expand...

The ones I deal with all charge a percentage subject to a minimum fee. They are more likely to agree to a fixed fee (no idea if they will or what it would be). Life companies computer systems can't handle a fixed fee basis yet. The world of money deals in %

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
SBarrett said:
The world of money deals in %
Click to expand...
That's not universally the case.

In the UK, for example, flat fee SIPPs are the norm. After all is said and done, it's just an account.

I would love to be able to manage my own pension savings on a platform that charges a reasonable annual fee but that seems to be a pipe dream.


:mad:
 

Hi Sarenco,

Would you not pay a Trustee a flat fee?

e.g. €2k

And then set-up an Execution Only account somewhere.

e.g. 20bps

And thenegotiate a decent commission rate

e.g. 25bps, which if you’re a ‘buy and hold’ investor is negligible

That’d get you out the gate pretty cheaply.
 
Gordon Gekko said:
Would you not pay a Trustee a flat fee?

e.g. €2k
Click to expand...
€2k!!!!

In the UK, you can set up a SIPP on a platform for a flat fee of around €150pa, with no ongoing commissions. Funds costs are obviously extra.

Incidentally, I don't agree that 25bps is negligible for a platform. Again, it's basically just an account.
 

But on the basis of the €1.4m you’ve got in there, that’s only 14bps.
 

How do they make money charging €150 a year?
 
SBarrett said:
How do they make money charging €150 a year?
Click to expand...
Well, I assume it's profitable or the platforms wouldn't be in business.

Bear in mind that there is no advice or unnecessary reporting involved - it's simply a trading platform.
 
Sarenco said:
Well, I assume it's profitable or the platforms wouldn't be in business.

Bear in mind that there is no advice or unnecessary reporting involved - it's simply a trading platform.
Click to expand...

It's a numbers game. 228 accounts to pay for a salary of £30,000 a year (including employer national insurance). And that's before office rent, rates, insurance, server costs, regulatory costs etc. They either:

1) Have a massive number of policy holders
2) Wafer thin profit margins
3) Are making money elsewhere

I would wager it is 3) and they are getting the slice of the cost of a trade.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
I would argue that the question an adviser should really be asking is how can we provide such value in Ireland rather than defend the status quo which does not serve the majority of clients very well.

% charges (...read commission) is a very silly way of charging from a client's perspective - at least, for most clients. I suspect that financial advisers will not agree with this because they are conflicted and "it is difficult for people to understand things when their income stream is best served by not understanding things." Dems de facts....rough-hew them how you will....
 
Last edited:

It's not the financial advisor who sets this. I have lots of clients that pay me a flat fee and I am quite happy to charge on that basis. No insurance company can cater for this, only self directed providers can do this. Others pay me a fixed fee directly from their bank account.

All the providers charge on a % basis, even the ones that cater for me to be paid on a fee basis.


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

Insurance companies can take a monthly policy fee - e.g. €3.50 per month.

There is no reason why they could not also deduct a monetary adviser fee in the same way.

This would be far more transparent and fairer.

Imagine someone with a million euro in an ARF receiving an annual statement:

Opening balance: €1,000,000
Investment growth € 20,000
Withdrawals (€ 40,000)
Adviser commission (€ 5,000)
Closing balance € 975,000

As I said, I didn't expect you to understand or agree - rough-hew it how you will.

In this way, the client can ask what service did I receive for my €5k this year, remembering that investment strategy is a long-term game.
 

I fully understand and have told you that I am quite happy to be paid on a fixed fee basis. I think you're trying to start a fight with someone who agrees with you.

SBarrett said:
I have lots of clients that pay me a flat fee and I am quite happy to charge on that basis.
Click to expand...

I have had conversations with insurance companies about this and they don't offer it, it would require a massive change in their systems to do it.

I would think that there are other issues to be fought before this one such as the smoke and mirror of brokers charging large upfront commissions and telling clients that there is no cost to them when the real cost is a large amc that will be levied against their money for decades.

You have also focused on advisors charging fees as a % but never mentioned the provider or the fund managers. Should they charge on a fixed fee basis too? Would this make access to investments unrealistic to the small investor who wants to save a few hundred a month?


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
SBarrett said:
I fully understand and have told you that I am quite happy to be paid on a fixed fee basis.
Click to expand...

I think that's great. Hopefully, more of your colleagues will see this light! And that ultimately customers receive value for money.

SBarrett said:
I have had conversations with insurance companies about this and they don't offer it, it would require a massive change in their systems to do it.
Click to expand...

I think that's nonsense. They just haven't had enuff demand and are happy with the status quo.


Let's not fall into the trap of justifying poor practice by turning the focus elsewhere.


Remember insurance companies are as comfortable with poor transparency as the average intermediary. Remember also that insurance companies are masters at disguising charges and aid and abet the upfront commission merchants you referred to. The white-socker wouldn't be white-socking unless he is giving the means and cover to do so! Look at the history of insurance companies: in the beginning, they had with-profit contracts (about as non-transparent as you can get in terms of charges). These were followed by initial unit contracts (almost as opaque unless you knew what to look for). Then they went for "nil allocation premiums" except that term was too understandable so they came up with "unit attribution suspense interval". You almost couldn't make this stuff up! So we agree - insurance companies could do more also.
 
You must log in or register to reply here.
Menu
Log in
Register