Increase in Davy Pension fees (from May 1st 2024)

[Savvy]

Increases announced:

PRSA:

Fund value	Current Charge	New Charge
€0-€49,999	0.75%	2%
€50,000+	0.75%	1%

Executive Pensions/Master Trusts
No change to 0.9% annual charge but minimum annual fee €1,000 and a change to how this will be calculated.
They are to start checking balances monthly and if the charge for that month is less than €83.33 (€1000/12) then that minimum will be charged.
The charges are still applied semi-annually.
Effectively for funds over €111,111 there will be no change(.9% of this amount will be €1000)

 

[Sarenco]

Ouch! That’s a big increase for small PRSAs.

Have you got a link for this?

 

[GSheehy]

So, for a non-Standard PRSA with a global index tracker the TER is going from 0.97% to 2.22% & 1.22% + transaction costs (if applicable).

Standard PRSAs a winner so.

 

[Savvy]

Ouch! That’s a big increase for small PRSAs.

Have you got a link for this?

Sorry these were documents on my account.

 

[gort_gráinneog]

So, for a non-Standard PRSA with a global index tracker the TER is going from 0.97% to 2.22% & 1.22% + transaction costs (if applicable).

Standard PRSAs a winner so.

I've also received the same communication from Davy yesterday. This increase is a bit of a sting. I'm a public servant paying into a PRSA AVC with Davy where I've been purchasing a standard Vanguard Global Stock Index Fund. My fees were as you said 0.97% in total, but will now jump to 2.22% come May. Quite a jump.

I'll have to reassess other offerings.

 

[Savvy]

I understand the fees for lower fund sizes, but I think they should have kept the 0.75% for funds that are over say 100k or 200k. Not to abolish it altogether.

 

[Ministry Fox]

Really irritated by this increase. From 0.75% to 2%! And even after I reach €50k, it still jumps by a quarter to 1%. Pah!
Anyone know a better deal anywhere? Even trying to figure out what the charges are with many companies is a Herculean task.
From what I can make out via a quick web search, LA Brokers have a 1% deal with Zurich and 100% allocation but I think you're stuck with some kind of 'Default Investment Strategy'. Call me a cynic but I suspect that's code for Zurich making lots of unnecessary trades to cream off more fees. I'm a civil servant (new crappy pension scheme) and a company called Cornmarket seem to be active in that market, but I can't find any clear description of their fees. Lots of brochures with smiling happy people, but all of the pension providers excel at that.
Anything better out there?

 

[Sarenco]

I wonder is this related to the recent Bank of Ireland acquisition of Davy?

BOI also own New Ireland and I wonder is that where they want to place PRSA clients.

 

[FintanJ]

Lots of brochures with smiling happy people, but all of the pension providers excel at that.
Anything better out there?

So true

 

[Protocol]

Really irritated by this increase. From 0.75% to 2%! And even after I reach €50k, it still jumps by a quarter to 1%. Pah!
Anyone know a better deal anywhere? Even trying to figure out what the charges are with many companies is a Herculean task.
From what I can make out via a quick web search, LA Brokers have a 1% deal with Zurich and 100% allocation but I think you're stuck with some kind of 'Default Investment Strategy'. Call me a cynic but I suspect that's code for Zurich making lots of unnecessary trades to cream off more fees. I'm a civil servant (new crappy pension scheme) and a company called Cornmarket seem to be active in that market, but I can't find any clear description of their fees. Lots of brochures with smiling happy people, but all of the pension providers excel at that.
Anything better out there?

I'll reply later with a link to Cornmarket fees.

 

[Protocol]

Your AVC Scheme | Cornmarket

Learn everything you need to know about your AVC, Public Sector PRSA or get in touch with our expert retirement consultants today.

www.cornmarket.ie

Scroll down, click on Policy Fees and Charges.

Then select your trade union.

 

[MTB_FS]

Do Goodbody offer a similar service to Davy for an Execution Only PRSA account?

 

[Ministry Fox]

Your AVC Scheme | Cornmarket

Learn everything you need to know about your AVC, Public Sector PRSA or get in touch with our expert retirement consultants today.

www.cornmarket.ie

Scroll down, click on Policy Fees and Charges.

Then select your trade union.

Thanks for the link, Protocol.
So, the management fee is 1%. Except for one off payments, which change 4%. What concerns me more is that they don't list transaction charges.
They seem to provide 4 actively managed funds, but with the exception of Warren Buffett, actively managed funds always underperform passive index funds. Partly because no-one can predict the future and partly because the pension holders get stuck with the transaction charges of the all-too-active managers.
I'm also a little unclear about where Cornmarket make their money, which probably means they're taking it from me!

 

[GSheehy]

My fees were as you said 0.97%

Very few will actually admit this. All they see is the (headline) 0.75%.

I wonder is this related to the recent Bank of Ireland acquisition of Davy?

BOI also own New Ireland and I wonder is that where they want to place PRSA clients.

Insofar as it being down to margin and profitability I'd say it's very likely that it's 'bank' inspired. Banks don't get into bed with providers that are known for their low-cost / consumer focused products. Probably why most of them are in bed with Irish Life. Seriously doubt that Davy clients would be moved or directed towards New Ireland.

actively managed funds always underperform passive index funds

Mixed/Multi Asset funds will underperform a 100% equity tracker because 100% of the Mixed/Multi funds aren't always invested in equities. Actively managed 100% equity funds do hold their own or beat passive indexed funds (on a like-for-like cost basis).


Gerard

www.prsa.ie

 

[Protocol]

I'm also a little unclear about where Cornmarket make their money, which probably means they're taking it from me!

The pension fiirm / lifeco pays the broker Cornmarket a slice of the contribution charge and AMC.


Also, bear in mind that Irish Life own Cornmarket.

 

[LDFerguson]

Anyone know a better deal anywhere?

You can get a Standard Life PRSA with 100% investment / allocation and 0.9% annual charge for Vanguard index-tracking funds. If you transfer €100,000 or more from another PRSA or pension scheme the annual charge is 0.65%. Portfolio transaction charges come to 0.02% per year for many of Vanguard's index trackers, so total cost (including so-called "hidden" costs) is 0.92% or 0.67%.

Regards,

Liam
www.FergA.com

 

[Gordon Gekko]

You can get a Standard Life PRSA with 100% investment / allocation and 0.9% annual charge for Vanguard index-tracking funds. If you transfer €100,000 or more from another PRSA or pension scheme the annual charge is 0.65%. Portfolio transaction charges come to 0.02% per year for many of Vanguard's index trackers, so total cost (including so-called "hidden" costs) is 0.92% or 0.67%.

Regards,

Liam
www.FergA.com

Will they do an ARF at that price?

I thought Royal London had some very cheap products too?

 

[LDFerguson]

Will they do an ARF at that price?

I thought Royal London had some very cheap products too?

Standard Life's ARF with Vanguard fund options can be got for a lower annual charge ... <0.5% in some instances.

Royal London also have some low-charge ARF and Buy-Out Bond products but no PRSA.

 

[Ministry Fox]

Very few will actually admit this. All they see is the (headline) 0.75%.



Insofar as it being down to margin and profitability I'd say it's very likely that it's 'bank' inspired. Banks don't get into bed with providers that are known for their low-cost / consumer focused products. Probably why most of them are in bed with Irish Life. Seriously doubt that Davy clients would be moved or directed towards New Ireland.



Mixed/Multi Asset funds will underperform a 100% equity tracker because 100% of the Mixed/Multi funds aren't always invested in equities. Actively managed 100% equity funds do hold their own or beat passive indexed funds (on a like-for-like cost basis).


Gerard

www.prsa.ie

Re last point, Gerard, I'll have to politely disagree with you. From the Economist (16/10/21):

"Index funds have grown because of the validity of the core insight underpinning them: conventional investment funds are, by and large, a terrible proposition. The vast majority fail to beat the market over the years. Hefty management fees paid by investors in such ventures, often around 1-2% a year (and more for snazzy hedge funds), add up to giant bonuses for stockpickers. Index funds, by contrast, charge nearly nothing (0.04% for a large equity fund) and do a good job of hugging their chosen benchmark. Given time, they almost inevitably leave active managers in the dust."

But thanks for the information. And kudos too for signing with the company you represent.

 

[Steven Barrett]

I wonder is this related to the recent Bank of Ireland acquisition of Davy?

BOI also own New Ireland and I wonder is that where they want to place PRSA clients.

I'd say they looked at the self directed PRSA space and the price increases. ITC's LEAP ARF starts at 3% and goes down to 1% on amounts over €200,000.

Self directed pensions were always for bigger accounts, there was a lowering of thresholds over the last 7-8 years. These providers are in effect saying they don't want them anymore and pricing them out of it.

Will they do an ARF at that price?

ARF's are much more competitively priced than PRSAs!