Pension linked to an index with low charges

[South]

If that was true, then market forces would dictate that MAI's would have gone out of business and would have been replaced by AAs. In fact, more AAs have become MAIs over the years than vice versa.

I could not agree with that, just because somebody provides an inferior product to somebody else does not mean the inferior product will be less profitable, especially if the inferior product is marketed well.

AAs switched to MAI (according to most observers) because they did not have the skill-set to continue as AAs.

 

[Dave Vanian]

I never mentioned my background either - you brought my background up (not for the first time)

Because if you want to use your experience as a way of backing up your point below, it is relevant.

(2)From working in the industry, I am quite familiar with the direct sales staff in a whole host of companies - independent advice (not tied to a specific investment manager/insurer) is often worthwhile addition based on my experience.

So, in your experience of dealing with QL are you saying that you have found their staff don't have the qualifications to explain what an ARF is or calculate maximum funding for a director? This is what you suggest here.

Bear in mind that the OP does not know what an ARF is - so the level of service she requires (especially if putting in 20K a year) is a lot higher than what the QL arrangement would offer.

The OP is also a proprietary director - so would need to consider maximum contributions that her company can make on her behalf, again this is not a service that she can expect from QL.

 

[Dave Vanian]

I never disputed that they reduce the FMC by 0.5% - I pointed out that only two (one is the ISEQ!) equity funds start out at 1.0%, obviously I am correct in this assertion, all other equity funds by QL start at > 1%.

So do you also agree that in the example we have been using, QL offers the lower overall charges after 25 years, if a mix of their eight funds (four at 1% reducing to 0.5% and four at 1.2% reducing to 0.7%)?

And if so, Quinn Life should at least be included in an AA's pick list? If the client is unhappy with the range of funds offered, she can choose another provider. But she should still be made aware of the lowest-charging option.

 

[LDFerguson]

Ah there is no doubt clients prefer to have the full market choice rather than the limited product choice of a MAI, the changes are more on the compliance monitoring and regulatory side, that's fair enough but clients still appreciate the extensive market coverage of an AA (I don't really care what they are called to be honest!!) over that of an MAI.

But you just said that clients prefer...and clients appreciate...

If clients prefer, then no amount of marketing by MAIs will convince them to choose the "inferior product".

 

[South]

So do you also agree that in the example we have been using, QL offers the lower overall charges after 25 years, if a mix of their eight funds (four at 1% reducing to 0.5% and four at 1.2% reducing to 0.7%)?

And if so, Quinn Life should at least be included in an AA's pick list? If the client is unhappy with the range of funds offered, she can choose another provider. But she should still be made aware of the lowest-charging option.

It depends how long the client maintains their pension - if less than 20 years, she would be best to avoid QL.

Yes, I have heard from a number of sources that the answers to technical pension questions have been hard to come by from QL, I can't comment on my experience because I would not use them.

Of course QL would be an option, but there are plenty of other options too - I did not realise you were expecting an AA to provide a full invesment review service on a chat forum!

 

[South]

But you just said that clients prefer...and clients appreciate...

If clients prefer, then no amount of marketing by MAIs will convince them to choose the "inferior product".

Well they would not be clients unless they preferred an AA...

 

[LDFerguson]

Sorry, I misunderstood...you meant clients of yours prefer an AA. Of course they do. Just as clients of mine prefer a MAI. I thought you meant that the general public considered AAs superior to MAIs.

 

[South]

I was hardly speaking about clients of somebody else!!
The general public would not have a clue what a MAI or an AA is.

Most financial commentators recommend AAs though - I would imagine you would prefer MAIs.

 

[LDFerguson]

The general public would not have a clue what a MAI or an AA is.

I agree.

Most financial commentators recommend AAs though - I would imagine you would prefer MAIs.

What financial commentators do this then? In recent years?

I don't have a preference for MAIs over AAs. We chose to be MAIs from the outset as I felt it was the most suitable category for our business, and I was proven correct in that judgement.

I have a preference for superior advice over inferior. The categorisation of AA or MAI does nothing to distinguish between superior and inferior advice.

 

[South]

Well AA means a full product offering versus MAI meaning a restricted product offering.

That is great that the MAI has worked out for you.

 

[Dave Vanian]

It depends how long the client maintains their pension - if less than 20 years, she would be best to avoid QL.

Yes, I have heard from a number of sources that the answers to technical pension questions have been hard to come by from QL, I can't comment on my experience because I would not use them.

Of course QL would be an option, but there are plenty of other options too - I did not realise you were expecting an AA to provide a full invesment review service on a chat forum!

So by extension, if she maintains her pension for over 20 years, she would be best to consider QL.

I won't comment on the hearsay about QL service as it cannot be substantiated.

I don't expect a full investment review service on a chat forum but I'm curious as to why Quinn Life wasn't mentioned in the original replies to Carolina, except by capall, who I understand is not an industry professional.

 

[LDFerguson]

Well AA means a full product offering versus MAI meaning a restricted product offering.

That's correct. The distinction is between the scope of the advice offered. Neither one is superior to the other in terms of the quality of advice.

That is great that the MAI has worked out for you.

Thanks.

 

[South]

Absolutely - the full range versus a limited agency, I never suggested otherwise, as you know the AA covers the full range in the market.

You're welcome.

 

[South]

So by extension, if she maintains her pension for over 20 years, she would be best to consider QL.

You are quite incorrect here - there is more to selecting a suitable pension than selecting the cheapest, would the best car in a garage be the cheapest one?

I don't expect a full investment review service on a chat forum but I'm curious as to why Quinn Life wasn't mentioned in the original replies to Carolina, except by capall, who I understand is not an industry professional.

Maybe because of widespread experience of the service offered by QL?
I have no idea why but that is one possibility.

 

[LDFerguson]

...the full range versus a limited agency...

Personally I prefer "the full market versus the products of all companies with whom the MAI holds an appointment" but I'll let you away with it.

Discovered only recently that Quinn Life have granted agencies to MAIs on a nil-commission basis in the past.

 

[Dave Vanian]

You are quite incorrect here - there is more to selecting a suitable pension than selecting the cheapest, would the best car in a garage be the cheapest one?

Invalid comparison - A huge consideration in buying a car is the budget of the buyer. That's not an issue here as the amounts to be invested will be the same regardless of the provider.

I'm not saying that cheapest is best - I'm saying that people should be made aware of the cheapest so that they can make an informed decision. She should consider QL.

Maybe because of widespread experience of the service offered by QL? I have no idea why but that is one possibility.

Again - I'll ignore because it's unsubstantiated.

 

[South]

Of course she should consider QL - there is no provider that should not be looked at and considered.

The main issue when choosing a product is the quality and value of the product.

 

[Dave Vanian]

Now we're getting somewhere.

 

[South]

I am glad you think so, more importantly I hope that the OP will find the discussion of interest and relevant to her query.

 

[Dave Vanian]

If using index funds I would advise a diversified approach with no one fund forming too large a percentage, rather than a core satellite approach with one fund being the core. But that's a difference of opinion - neither one of us can say which one will achieve better results in the future.