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Er - which is it? Stay or go?For instance, I am currently with Eagle Star (Default Investment Strategy) and I am paying a 5% commission charge. However, I would now rather change my pension over to an Irish Life one
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I would rather stay with Eagle Star if I can, however, I do not want to pay an on-going 5% commission charge.
If they are invested in more or less the same funds then there is no significant difference.BTW, do you think that there is any difference between the non-commission based PRSAs and their 5% counterparts? Are they really the same, except that you do not pay commission on the 0% one?
The broker is not charging the 5% - the underwriter is. Although the underwriter will presumably pay the broker for business out of it. The 5% charge doesn't guarantee advice and many PRSAs are sold on an execution only basis. If you need advice then go to an authorised advisor or good multi-agency intermediary and ideally agree a fixed fee for the advice rather than having the intermediary remunerated via commissions which migh bias him/her towards one provider over another regardless of your best interests.I think that the only difference between them is that you get some advice off the broker when setting up the commission based one. However, when you think about it, that advice is quite expensive when the broker is going to charge you 5% for the life time of the product. It may seem that in such instances that no advice may have been the better option!
Units in the fund are bought and sold at the same price. Often (with any unit linked fund) there is a bid offer spread of up to about 5% which means that there is a 5% difference between the price at which you buy units at the price at which you sell them. Basically if you bought and sold €100 worth of units then you would end up with €95. With a B/O spread of 0% you get your €100 back. Hypothetical example since you would not normally buy and sell immediately like this.1) Bid offer spread:- 0%
Presumably that they top your contribution up by 0.75%?2) If you pay at least €6000 a year and less than €12000 a year then you receive an extra allocation of:- .75%.
What does "you receive an extra allocation of .75%" mean?
If there is then don't pay too much attention since past performance is no guide to future returns. Better to concentrate on minimising charges and choosing a fund suited to your needs (e.g. perhaps a high risk/reward/equity content fund if you have a good while to go to retirement).3) Is there a web page on a comparison of how the different PRSA's have performed over the last couple of years?
Er - which is it? Stay or go?
There is nothing stopping you from parking the ES pension and opening a new one with another provider on a 0%/c. 1% contribution charge/annual management basis.
Forget about hurting your broker's feelings. Look out for yourself!
If they are invested in more or less the same funds then there is no significant difference.
The broker is not charging the 5% - the underwriter is. Although the underwriter will presumably pay the broker for business out of it. The 5% charge doesn't guarantee advice and many PRSAs are sold on an execution only basis. If you need advice then go to an authorised advisor or good multi-agency intermediary and ideally agree a fixed fee for the advice rather than having the intermediary remunerated via commissions which migh bias him/her towards one provider over another regardless of your best interests.
What sort of broker have you been dealing with up to now?
Units in the fund are bought and sold at the same price. Often (with any unit linked fund) there is a bid offer spread of up to about 5% which means that there is a 5% difference between the price at which you buy units at the price at which you sell them. Basically if you bought and sold €100 worth of units then you would end up with €95. With a B/O spread of 0% you get your €100 back. Hypothetical example since you would not normally buy and sell immediately like this.
Presumably that they top your contribution up by 0.75%?
If there is then don't pay too much attention since past performance is no guide to future returns. Better to concentrate on minimising charges and choosing a fund suited to your needs (e.g. perhaps a high risk/reward/equity content fund if you have a good while to go to retirement).
Congratulations. Was in that position just over a year ago and it's been great fun since (seriously).Sorry for such a delay in getting back to you ClubMan. My wife and I have just had our first child - a baby girl - so things, as you can imagine, have been a bit hectic.
Doesn't sound too independent? What bank and what relationship do they have with ES?An expensive one ;-) One working for a bank.
If the bid offer spread is 0% and there are no other per contribution charges then yes - the allocation rate is 100%.I guess that this means that the allocation is 100%.
Providers sometimes give you such "free" money (i.e. invest more than 100% of your money) because they will probably make the money back on annual management charges into the future.Don't quite get this. If the policy is a 100% allocation then you would be getting 100.75%, which would mean that they are giving you free units? This would only seem to make sense if you started off at 95% allocation (or something similar) and then you move to 95.75% possibly?
Congratulations too. And one more nappy later...(seriously ;-).Congratulations. Was in that position just over a year ago and it's been great fun since (seriously).
Was a friend of family, so would rather not say. However, it is suffice to say, I've learned that you shouldn't put all your faith in your friend's advice - sense of false security and all that...Doesn't sound too independent? What bank and what relationship do they have with ES?
Ok - makes sense. Should be able to make a more informed decision now. Thanks again.If the bid offer spread is 0% and there are no other per contribution charges then yes - the allocation rate is 100%.
Providers sometimes give you such "free" money (i.e. invest more than 100% of your money) because they will probably make the money back on annual management charges into the future.
Providers sometimes give you such "free" money (i.e. invest more than 100% of your money) because they will probably make the money back on annual management charges into the future.
Told by whom? And what specific reasons did they give?I almost bought a PRSA myself and was told it was the worst option for anyone putting in a reasonable amount of money.
If there are then there shouldn't be. A low charges PRSA (e.g. possibly down to 0% on each contribution and c. 1% annual management charge) with a suitable range of funds to invest in is probably one suitable option for many people.There seems to be very confusiung messages emanating.
What do you mean by broker? Tied agent? Multi-agency intermediary? Authorised advisor?I didn't find the Financial Regulator any use at all as they can only compare the most vanilla options. I think everyone should use a broker
Told by whom? And what specific reasons did they give?
If there are then there shouldn't be. A low charges PRSA (e.g. possibly down to 0% on each contribution and c. 1% annual management charge) with a suitable range of funds to invest in is probably one suitable option for many people.
What do you mean by broker? Tied agent? Multi-agency intermediary? Authorised advisor?
You can get a 0%/1% PRSA with a good selection of funds (e.g. different risk/reward profiles) for a fixed once off arrangement fee of a few hundred €s. Anybody who issues a blanket dismissal of PRSAs is talking rubbish.Pretty much everyone - co-workers, friends in financial services, brokers, man on street. The main reasons were limited fund choices and higher charges (true for me personally).
Equally to assume that any single pension option is the only way to go would be foolish. Horses for courses.I was taken aback as I had believed PRSA was the only way to go for most people, myself included.
Where do you get 6% from? You can't simply add the 5% per contribution charge and the annual management fee by the way. That's meaningless.And the OP by the sounds of it now they are effectively paying 6% + in the first year on all contributions.
Yes - so perhaps look at a 0%/1% PRSA option. Or a similarly competitive personal pension plan option.Better than the 60% of old but still not good enough.
This is a separate issue for separate discussion.When I consider all the money being spent on the Financial Regulator and the Pension Board I don't think people are getting the information they require about the best place to buy a pension from them.
, if you got the maximum allocation I thought it was c. 102.5%
I understand that execution only brokers do not want eamils asking questions and do not act as advisors. If I need to feed my SSIA into the nil commission PRSA next year, who would be my actual point of contact? Irish Life/Eagle Star (haven't decided yet) or the broker? Same question if I wanted to make fund changes in the future?
Fanny
This old thread sums up my feelings about the whole PRSA business.
If I need to feed my SSIA into the nil commission PRSA next year, who would be my actual point of contact? Irish Life/Eagle Star (haven't decided yet) or the broker? Same question if I wanted to make fund changes in the future?
Fanny
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