I would expect to be able to get better pricing on an ARF, as PRSAs have to pay 0.05% of their value to the Pensions Authority each year
Possibly, but you'd need to compare the charges on each to be sure. The discretionary Royal London Ireland ValueShare bonus should also be factored on even if it's not guaranteed or the amount known in advance (0.13% so far for 2023 and 2024).So would the royal London prsa be cheaper for a public sector worker contributing about 6k per annum (open to either lump sum or monthly) vs the rest of the market, even execution only brokers via Zurich?
What are "SP" and "RP"?
RLI definitely have AMCs less than 0.75%.
But Standard Life also have funds with an AMC of 0.4% (but no ValueShare bonus scheme).
Is it true Royal London work through broker only? Interesting that they are they still cheaper?
I think that that's the case alright.Is it true Royal London work through broker only?
Well, by only doing business through brokers they avoid the costs of maintaining their own broker/client service division and outsource the costs involved to the brokers even if they pay them commission for acquiring business and managing customers.Interesting that they are they still cheaper?
I believe that's down to the rules regarding PRSAs. Every proving option has to be registered with the Pensions Authority as a separate product, so I would guess that it's not possible to change the pricing on an existing policy.Existing SL policy holders appear to be excluded from this level of rebate
Two thoughts occur to me from reading this….I think Standard Life's PRSA seems more competitive than many of the established life companies. However, it appears to have a number of disadvantages in comparison to Royal London Ireland. SL's AMC on Vanguard passive funds is actually 0.9%. The "rebate" may be subject to conditions such as external transfers in, single premium contributions and a balance of over €100k. I'm not familiar with the contract terms and whether the rebate is guaranteed over the policy term. Existing SL policy holders appear to be excluded from this level of rebate which, personally, I would find unacceptable. The incentives for brokers also seem to be changing in 12 days, which may have an impact on the availability of the rebate:
https://www.standardlife.ie/adviser...ews/enhanced-bonus-commission-on-synergy-prsa
It is very difficult to compete with RLI's AMC of effectively 0.32% simply because the company is owned by its policy holders rather than external investors. It's interesting how many commentators on AAM have stated over many years how it is impossible to offer internationally competitive AMCs on pension products here simply because the Irish market is too small in comparison with the UK, for example. Yet RLI seemed to have done it with a tiny slice (1.1% in 2023) of that market.
Until just a year or two ago, a 1% AMC was deemed good value from the major life companies. A 41 year old with a PRSA of €100k only growing at 10% nominal will pay €220,000 in charges at 1% AMC over 25 years. At 0.32%, the charges drop to €75,600. That difference in charges alone, which sounds unimportant, could fund a holiday apartment abroad for the retiree, nominally at least!
Where/on what page is that? I can't seem to see it.I find it remarkable that an “Adviser” tab disclosing variable commissions is publicly visible on the provider’s website.
Does that really matter that much given that PRSAs are portable without penalty or restrictions? Your PRSA provider starts charging "too much", just move?AMCs can change with a few months notice. On Standard PRSAs they can't go above 1%, on Non-Standard PRSAs there's no such limit. Ask Davy's clients.
Do you mean that pricing strategy may have been influenced by the erstwhile "unlimited funding loophole" which has now been limited/closed off?But remember what the legislation stated at that time - unlimited contributions by employer to PRSAs - and I'd say, given the length of time it takes to approve a 'new' PRSA price, that it was anticipated that that rule wouldn't change and was priced into the new AMCs.
Again, you mean largely on foot of the "unlimited funding loophole"?If the PRSA providers that were in the market for all of 2024 don't announce that there was expotential growth in PRSA business last year then they were doing something wrong. If you're writing 50%+ more business
Just click on the link supplied by Poseidon. At the top you can select between Personal and Advisor.Where/on what page is that? I can't seem to see it.
That's the reason that the life companies like to give. In reality, all they have to do is to set up a new, lower cost policy B and then internally transfer from policy A to policy B. They typically won't do it for those existing customers who realize that they're being charged more than new customers. Presumably they know that most customers won't bother to leave them and probably don't even know their AMC.I believe that's down to the rules regarding PRSAs. Every proving option has to be registered with the Pensions Authority as a separate product, so I would guess that it's not possible to change the pricing on an existing policy.
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