The Mysteries of Quinn Life/EBS

  • Thread starter Rupert Bear
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Rupert Bear

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Everybody knows that <!--EZCODE ITALIC START--> Quinn Life<!--EZCODE ITALIC END--> is far cheaper than <!--EZCODE ITALIC START--> Irish Life<!--EZCODE ITALIC END--> and yet the <!--EZCODE ITALIC START--> QL Eurostoxx Tracker (Net)<!--EZCODE ITALIC END--> is down <!--EZCODE BOLD START--> 26%<!--EZCODE BOLD END--> year to date whilst Irish Life's equivalent <!--EZCODE ITALIC START--> Eurostoxx Scope (Net)<!--EZCODE ITALIC END--> is down only <!--EZCODE BOLD START--> 22%<!--EZCODE BOLD END-->. <!--EZCODE ITALIC START--> (See Here for details.)<!--EZCODE ITALIC END-->

<!--EZCODE ITALIC START--> Cardinal Connell<!--EZCODE ITALIC END--> will undoubtedly have an explanation based on the nature of angels but I believe I have a simpler answer which even <!--EZCODE ITALIC START--> Empey<!--EZCODE ITALIC END--> could follow.;)

See, both these funds are NET funds. That is they are old style funds <!--EZCODE UNDERLINE START-->taxed internally<!--EZCODE UNDERLINE END-->.

When assets rise they are subject to 20% tax. Conversely when they fall you get 20% tax relief for the losses. But there is a catch - you only get relief for the losses if you have gains or income to set them against (on second thoughts I've probably lost <!--EZCODE ITALIC START--> Empey<!--EZCODE ITALIC END--> by now:lol ).

Poor old QL.:( They are far too small and new to have generated any taxable income. So when the shutters came down on the old tax regime QL were left naked. Any losses would have to be taken on the chin wild jolly old Irish Life had oodles of taxable income against which to set any losses.

Just in case you think this presents a chance to get in cheap to QLD's fund - no such luck - these funds are closed to new business.:eek
 
Quinn Life

Can we compare Irish Life's and Quinn Life's gross funds ?
 
Re: Penions Comparison

Excellent point Dynamo, can you give Lucretia a private lesson on life assurance taxation?:|

The above link reveals QL Euro Pensions year to date <!--EZCODE BOLD START--> -26%<!--EZCODE BOLD END-->, exactly the same as their so called <!--EZCODE BOLD START--> Net<!--EZCODE BOLD END--> fund and Irish Life are <!--EZCODE BOLD START--> -27%<!--EZCODE BOLD END--> which goes to prove that <!--EZCODE ITALIC START--> Mith<!--EZCODE ITALIC END--> is right QL are cheaper.:eek
 
Miaow!

<!--EZCODE BOLD START--> can you give Lucretia a private lesson on life assurance taxation<!--EZCODE BOLD END-->

Now, now! Let's have no more of that and let's stick to the matter in hand! :lol
 
Net versus gross rollup

<!--EZCODE BOLD START--> Just in case you think this presents a chance to get in cheap to QLD's fund - no such luck - these funds are closed to new business.<!--EZCODE BOLD END-->

Is that not the case for all net funds? I thought that any new business since Jan 2001 (?) was implicitly gross rollup? On the other hand I seem to remember EBS giving the option of choosing their Summit (net) or Mutual (gross) funds. More obfuscation methinks.... maybe I'll also sit in on that tutorial if it's going :\
 
Re: Net versus gross rollup

You would seem to be correct CM, although I too don't understand how...

I spoke to EBS recently and the woman I spoke to said that they are offering both gross and net funds. She said it was because in certain circumstances the net fund performed better than the gross fund and vice versa.

It seemed to make sense, but what I can't figure out is how they are <!--EZCODE BOLD START--> allowed<!--EZCODE BOLD END--> to continue to have a net fund open.

Dev.
 
Summit Funds

Yes - I have the EBS Summit Funds brochure (dated February 2001) in my hand and on the front it has <!--EZCODE ITALIC START--> Summit Funds - with two tax options<!--EZCODE ITALIC END-->. Inside it goes on to explain these which are branded <!--EZCODE ITALIC START--> Summit Investment Funds<!--EZCODE ITALIC END--> (net) and <!--EZCODE ITALIC START--> Summit Mutual Funds<!--EZCODE ITALIC END--> (gross roll-up). Their illustrative tables (based on an assumed 8% p.a. and 12% p.a. growth and no partial encashments) show that (as pointed out in another post elsewhere on AAM today) generally the difference between the net and gross is small with net marginally ahead in years 1 to 7 while for terms of 10 or 15 years the gross fund is marginally ahead.

Anyway - it's still odd to me because I thought that once the gross roll-up regime came into force that net funds were supposed to be closed to new business.
 
Re: Net versus gross rollup

Let me assure everyone that there is no choice - <!--EZCODE BOLD START--> all collective investments currently open to new business are Gross<!--EZCODE BOLD END-->.8)

I suspect that prior to the intro of Gross on January 1 this year EBS may have being offering some kind of choice. I fear that the woman who <!--EZCODE ITALIC START--> Devils Ad<!--EZCODE ITALIC END--> was speaking to must have been absent on the day when EBS instructed its staff that Gross is now the only option.

Alternatively, she confused her message with the party line in respect of <!--EZCODE BOLD START--> existing<!--EZCODE BOLD END--> customers. You see on balance these customers should switch over to gross but then EBS would lose out on tax relief on their expenses.

<!--EZCODE ITALIC START--> Clubman<!--EZCODE ITALIC END-->, I was not suggesting that QL were being sneaky in debarring new business as you are correct this is universal.:|
 
Re: Summit Funds

Hi, <!--EZCODE ITALIC START--> Clubman<!--EZCODE ITALIC END-->, our postings crossed paths.

This is most bizarre.:eek

That brochure is <!--EZCODE BOLD START--> WRONG<!--EZCODE BOLD END--> - <!--EZCODE ITALIC START--> Devils Ad<!--EZCODE ITALIC END--> can you phone again? We gotta sort this out.:eek

Incidentally the new life regulations which also came into force in January this year require a maximum illustration of <!--EZCODE BOLD START--> 10%<!--EZCODE BOLD END--> per annum. I know Summit Funds are not life assurance funds but I thought EBS were one of the good guys - why are they using a regulatory loophole to oversell their products at <!--EZCODE BOLD START--> 12%<!--EZCODE BOLD END-->.:(

We have been missing the plot here. Here we all our gunning for that minnow (<!--EZCODE ITALIC START--> Mith's<!--EZCODE ITALIC END--> term), Quinn Life, when EBS are getting away with murder! I've half a mind to go into the <!--EZCODE ITALIC START--> Letting off Steam<!--EZCODE ITALIC END--> room with this one.>:
 
EBS

<!--EZCODE BOLD START--> why are they using a regulatory loophole to oversell their products at 12%.<!--EZCODE BOLD END-->

I'm no expert but I presume this "loophole" is that Summit funds are UCITS and, as such, not constrained by the IIF (?) illustration guidelines/rules? Unfortunately, as criticised by Brendan in the past, EBS also obfuscate ;) things by quoting some of their annual management charges net (sometimes also gross), the logic of which nobody seems to have been able to explain. Perhaps this is another UCITS related thing?
 
Re: EBS Loophole

Yes,

As UCITS, EBS do not have to follow life regulations (set by Government since January 1, IIF no longer involved), with max growth rates, year by year charges disclosure and full disclosure of commission/remuneration.

But one would have thought given the shininess of their halo that they would not have exploited this obvious discrimination in the legislation.>:
 
EBS

Just back from the EBS in D'Olier Street and the <!--EZCODE ITALIC START--> Summit Funds - with two tax options<!--EZCODE ITALIC END--> booklets are still on display. A query about the availability of these two taxation options elicited a none to clear response which sounded like only gross roll-up is available nowadays.
 
Re: EBS

So there is some truth in the adage that Mutuals are less efficient than shareholder companies!:\

This cannot be excused by sloppy administration.

It was their Head Office and the brochure was printed in February this year - very poor show.>:
 
Mistrust

<!--EZCODE BOLD START--> It was their Head Office and the brochure was printed in February this year<!--EZCODE BOLD END-->

So you wouldn't take my word for it (above) then - wha'!? :lol
 
Re: Mistrust/Celebration Bond

I trusted you <!--EZCODE ITALIC START--> ClubMan<!--EZCODE ITALIC END-->. I just thought you must have some old brochure which was mistakenly printed in February time. But to hear that it is alive and well and residing at Head Office <!--EZCODE BOLD START--> now in November<!--EZCODE BOLD END-->! Well, I'm shocked:eek

This Net/Gross thing has got a few other twists, methinks. Maybe you can help me on this one <!--EZCODE ITALIC START--> CM (or somebody else for that matter)<!--EZCODE ITALIC END-->.

I see from a current brochure of Celebration Bond that the declared annual bonus for 2001 <!--EZCODE ITALIC START--> (not the Headline bonus, don't want to get into that old debate again)<!--EZCODE ITALIC END--> is 6%. This is presumably Gross i.e. subject to Exit Tax.

But the brochure tells me that Celebration Bond has been around since 1997 so earlier versions are clearly taxed internally. What is the 2001 annual bonus on earlier Celebration Bonds? Is it also 6%? If so Net Celebration Bonds are getting a far better deal than today's Gross versions.:|
 
The EBS Summit Funds are net Funds !

Have a look at their [broken link removed] and you will see that the EBS do offer a net fund. It is the only such fund available to new investment at the moment.

I am surprised that our friend CM walked all the way down to Westmoreland Street when he could have found it on their website.

I have been critical in the past of the EBS for quoting charges net instead of gross, but I was wrong to be so critical. I made a new year's resolution to understand their charging structure and the results are to be found . However, this post was in the pre Galileo/Ruper Bear days and I now suspect my conclusions will be challenged and found wanting...

Brendan
 
EBS visit

<!--EZCODE BOLD START--> I am surprised that our friend CM walked all the way down to Westmoreland Street when he could have found it on their website.<!--EZCODE BOLD END-->

Just noticed that I relocated the EBS head office to D'Olier Street above! :O I must have been mixing it up with the IBTS who also extract my blood from time to time. :lol Anyway, far be it from me to walk when I can surf but I did have quite a bit of other business to carry out with the EBS on Friday as it happens. Happily mortgage free now!!! :rollin
 
Re: The EBS Mystery deepens

Thanks for those links, <!--EZCODE ITALIC START--> Boss<!--EZCODE ITALIC END-->.



If EBS have a choice of Gross/Net for new customers, I'll eat my scarf.

How do I explain CM's brochure and the EBS' website?

All I can think of is that before everything went Gross on January this year this would have been a valid choice.

It remains a valid choice for people who are in existing Net funds especially as EBS have no exit/entry charges. It is a very real question for such clients whether to switch. But I repeat that the option <!--EZCODE BOLD START--> does not exist for new customers<!--EZCODE BOLD END-->. I would ring EBS myself but as a bear my telephone technique is not the best.;)

<!--EZCODE BOLD START--> The Issue of Net Management Charges<!--EZCODE BOLD END-->

Read your comments, <!--EZCODE ITALIC START--> Boss<!--EZCODE ITALIC END-->. Nearly agree with all that, but just a little clarification <!--EZCODE ITALIC START--> (the following carries a Government Empey Warning:lol ).<!--EZCODE ITALIC END-->

Under the old Net regime there was in fact no difference in the <!--EZCODE BOLD START--> actual<!--EZCODE BOLD END--> taxation <!--EZCODE BOLD START--> payable to Revenue<!--EZCODE BOLD END--> of customers of Unit Trusts <!--EZCODE ITALIC START--> (like EBS Summit Funds)<!--EZCODE ITALIC END--> and life funds. But there was a difference in what they respectively <!--EZCODE BOLD START--> deducted<!--EZCODE BOLD END--> from the funds under the <!--EZCODE BOLD START--> guise<!--EZCODE BOLD END--> of taxation. Let me try and explain.

The actual taxation <!--EZCODE BOLD START--> payable<!--EZCODE BOLD END--> to Revenue in each case was standard rate times the "income <!--EZCODE BOLD START--> less<!--EZCODE BOLD END--> management charges". Unit Trusts, being regulated by the Central Bank, were only allowed to charge customers the tax that they actually had to pay over to Revenue <!--EZCODE ITALIC START--> (eminently reasonable don't you think)<!--EZCODE ITALIC END-->.

Life companies on the other hand developed the practice of deducting tax on <!--EZCODE BOLD START--> ALL<!--EZCODE BOLD END--> the investment income in the fund and keeping the relief on the management charge for themselves. Every life company did it this way even QLD.>:

In these circumstances EBS were quite right to net down their management charge so that one was comparing like with like.

<!--EZCODE BOLD START--> BUT<!--EZCODE BOLD END--> everything is now levelled up. There is no longer a distinction between a 1.4% management charge as levied by EBS Summit Fund and the same charge as levied by a life company. Implicitly the customers enjoy 23% relief in either case through the exit tax mechanism.

I note that with their latest offering the EBS are still using this "netting" device even though it is no longer relevant and is indeed now quite misleading as a life company with the exact same charge would describe it as 1.4% whilst EBS are describing it as 1.1% - I presume it's the same crass inefficiency which has them still labouring under the illusion that their Net funds are still open to new business.:|
 
Re: Recommended Seasoning for Scarves

Hi <!--EZCODE ITALIC START--> Boss<!--EZCODE ITALIC END-->,


Does the implication that I should be considering the finer details of my meal suggest that you will be phoning EBS to sort this incredible mystery out once and for all? 8)
 
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