1. what is the difference between self directed and self administered?
With a self-administered scheme, you set up a trust and appoint a professional pensioneer trustee to oversee the trust with you. You control every espect of the trust, e.g. you can use any stockbroker you want; can use your own solicitor for property transactions etc.
With a self-directed arrangement, you start a policy with a pension company e.g. Standard Life or Irish Life and they take on the role of pensioneer trustee. You can still direct them to purchase your chosen investments but you must use their professional team e.g. stockbrokers, solicitors etc.
2. What is an insured scheme? Is that the same as a managed fund?
Yes - the customer chooses a suitable Managed Fund or Index-Tracking fund but the day-to-day investment decisions are made by the fund manager. It's another term for "not self-administered or self-directed", I suppose.
3. Apart from set up costs, what is self administered or self directed likely to cost on an ongoing basis?
Cost of self-administered depends largely on the individual pensioneer trustee used. Typically €1,000 per annum plus around €750 every three years for an actuarial report.
Self-directed tends to be around 1% of scheme assets per year.
Transaction costs (e.g. stockbroker fees) will be additional in either case.
4 If one can switch from insured polict to self administered, can you do the reverse also? Are there limits to the amount of switches you can make?
Yes you can move your fund from an insured scheme to self-administered and back again. There's no restriction on how often you can do this, but you'd need to be mindful of the cost of doing so, and convinced that the potential benefits will justify the cost.
Is this to suggest that charges would rise after an initial period?
No, but the Standard Life / Irish Life percentage-based charging model (1% of scheme assets per year) will effectively get dearer as the fund grows. Self-administered schemes tend to have a flat fee charge, so if your fund builds to €1,000,000 the 1% per year starts looking expensive compared with a flat charge.