Global Absolute Return Strategies (GARS) Fund - Standard Life
Risk Profile : Low-Medium
This fund has similar volatility rating to a cautious managed fund but it invests in a broader range of assets. It aims to provide positive investment returns in a variety of market conditions over the medium term by providing access to a range of different assets and strategies.
The Annual Management Charge is 1.35% and there are no entry or exit charges if you invest though www.bond.ie on an ‘Execution Only’ (no advice) basis.
SuperCAPP Fund - Zurich Life
Risk Profile : Moderate
A unitised with-profits fund that aims to deliver a regular return, consistent with prevailing long-term interest rates while maintaining the potential for higher growth than a bank deposit account. The fund will have exposure to bonds, equities and cash.
Returns are distributed through Annual and Special Dividends. Dividend distributions aim to provide policyholders with a smoothed accumulation of returns over time.
It has an indicative equity range of 20% – 40%. The fund’s exposure to equity volatility is normally controlled by limiting maximum losses and gains for the majority of the equity portfolio.
The Annual Management Charge is 1%. Zurich Life also retain 1/20th of earnings, distributable as policy dividends. This latter charge is taken before the dividends are declared. For Non-Standard PRSAs only, the charge for this fund is 1.25%.
Brendan Johnston, Pensions Director, and David Kavanagh, ALM Actuary, Zurich Life, talk about the SuperCAPP Fund in a Z-Cast.
Diversified Assets Fund - Zurich Life
Risk Profile : Medium
A unit-linked fund that gives exposure to four asset classes: equities, bonds, property and commodities. The following Zurich Life investment funds are currently used to gain access to these asset classes: the International Equity Fund, the Active Fixed Income Fund, the European (Ex-UK) Property Fund (via ETF) , the Australasia Property Fund (via ETF), the Global Commodities Fund (via ETF).
Indicative Equity Exposure is 70% to 80%. The Annual Management Charge is 1%
Cautiously Managed Fund - Zurich Life
Risk Profile : Moderate
A unit-linked fund offering a well-diversified portfolio of bonds, equities and cash. It has an indicative equity exposure of 20% – 50%. The Annual Management Charge is 1%
These Zurich Life Funds can be accessed for Savings/Investment via www.investandsave.ie and for some Pension Products via www.prsa.ie. There are no entry or exit charges on the products available through these websites and they are on an ‘Execution Only’ (no advice) basis.
Some Caveats
* If you do not understand why you should save/invest in these products or what investment funds are appropriate to your risk profile, then an ‘Execution Only’ service may not be suitable for you. If you need advice, pay a fee for it and then purchase the products online.
* The above funds are not to be interpreted as a generic recommendation as each person will have a different investment profile based on their attitude to risk, term of investment and current investment portfolio.
* Some or all of the assets in the different funds are invested outside the Eurozone, so currency fluctuations may impact on the funds performance.
* The 1% Annual Management Charge on the funds that invest via ETFs does not include any charges that may accrue within the ETF.
Warning: Past performance is not a reliable guide to the future performance. The value of your investment may go down as well as up.
Friday, November 12, 2010
Thursday, September 23, 2010
Pension Companies and Business Retention
Even though I am short on the full technical details of Irish Life’s ‘New Deal In Pensions’; it looks like they are moving in the right direction with regard to addressing business ‘retention’.
The ‘retention’ issue has become a major problem for pension providers. Business that was ‘new’ to the a pension company 5 years ago (approx) is not staying on their books long enough for them to make money on the transaction. Instead, the business is being moved to a different pension company, who then register this a ‘new’ business to them. And so the cycle continued....
The major reason why this is happening is a symptom of the way in which pension companies remunerate advisors. A large chunk of commission is paid up-front which is normally conditional on the business staying with the pension company for 5 years, otherwise some/all of this payment would be clawed back by the pension company.
It has taken a while for pension providers to fess up to this. The move by Irish Life, which spreads and increases remuneration, is an attempt to stem the flow of business away from them so as to build a sustainable business model.
The bar has been set fairly high by Irish Life and it will be interesting to see how their competitors react to this strategic move. A rough estimate, on the figures to hand, would indicate that the break-even for Irish Life on the new structure has been pushed out to year 10+. A competitor would need fairly deep pockets to top that.
The ‘retention’ issue has become a major problem for pension providers. Business that was ‘new’ to the a pension company 5 years ago (approx) is not staying on their books long enough for them to make money on the transaction. Instead, the business is being moved to a different pension company, who then register this a ‘new’ business to them. And so the cycle continued....
The major reason why this is happening is a symptom of the way in which pension companies remunerate advisors. A large chunk of commission is paid up-front which is normally conditional on the business staying with the pension company for 5 years, otherwise some/all of this payment would be clawed back by the pension company.
It has taken a while for pension providers to fess up to this. The move by Irish Life, which spreads and increases remuneration, is an attempt to stem the flow of business away from them so as to build a sustainable business model.
The bar has been set fairly high by Irish Life and it will be interesting to see how their competitors react to this strategic move. A rough estimate, on the figures to hand, would indicate that the break-even for Irish Life on the new structure has been pushed out to year 10+. A competitor would need fairly deep pockets to top that.
Monday, September 6, 2010
Don’t bank on getting the best pension terms from your bank!
PRSA: Meeting financial expectations
Discount pension services provide cost effective retirement planning for you and your employees, writes Gerard Sheehy
As business owners we are always on the lookout for ways in which we can save money. If we can find a more cost effective way of doing something we tend to jump at the opportunity to add value to the bottom line, even if this means taking on some extra responsibility ourselves.
Recent economic events have made us question what we are paying for goods and services and what value is being added by third parties. Some areas for making savings are obvious, others less so. Take pension provision for example. The charging structures on pension products have become more competitive. It may be in your and your employees’ interest to do an audit of your pension costs.
It is now possible to reduce the charges on PRSAs, AVC PRSAs, personal pensions, executive pensions; approved retirement funds (ARFs) or personal retirement bonds by buying these products without the costs associated with financial advice.
The trade-off is simple - it involves spending time in order to save money. This necessitates taking a more proactive role in the selection of pension product and investment funds which gives you greater control of your product costs.
You should consider this type of service if:
(i) You have a good understanding of what type of pension product is suitable for you.
(ii) You are comfortable with selecting investment funds appropriate to your risk profile.
(iii) You want to buy a low-cost product.
(iv) You do not require financial advice.
If you feel that you satisfy these criteria you will be able to limit your costs to a single charge on the pension product of your choice. This should be no greater than a 1% annual charge on the value of your pension fund. As there is no contribution charge, 100% of any employer/employee payments are invested in the pension.
This service is not restricted to employers/employees that are affecting “new” pensions, it can also be used by those who already have a private pension and wish to transfer their existing pension funds or redirect future contributions.
You should not expect your bank to offer you this type of service on PRSA schemes, as they more-than-likely put a premium on their advice. The employee and employer could be paying (up to) a 5% charge on each payment that is remitted but they may be getting very little in the form of advice for this cost.
Even if the employer has an existing PRSA scheme in place, they should consider offering a low-cost option to those employees that have a good understanding of their financial needs.
Gerard Sheehy is a financial advisor for PRSAS. For more information log on to www.prsa.ie
The above article is in the Pension & Investment Supplement of the Septmeber 2010 Issue of Business & Finance
This is the Advertisement that accompanied the above text
Discount pension services provide cost effective retirement planning for you and your employees, writes Gerard Sheehy
As business owners we are always on the lookout for ways in which we can save money. If we can find a more cost effective way of doing something we tend to jump at the opportunity to add value to the bottom line, even if this means taking on some extra responsibility ourselves.
Recent economic events have made us question what we are paying for goods and services and what value is being added by third parties. Some areas for making savings are obvious, others less so. Take pension provision for example. The charging structures on pension products have become more competitive. It may be in your and your employees’ interest to do an audit of your pension costs.
It is now possible to reduce the charges on PRSAs, AVC PRSAs, personal pensions, executive pensions; approved retirement funds (ARFs) or personal retirement bonds by buying these products without the costs associated with financial advice.
The trade-off is simple - it involves spending time in order to save money. This necessitates taking a more proactive role in the selection of pension product and investment funds which gives you greater control of your product costs.
You should consider this type of service if:
(i) You have a good understanding of what type of pension product is suitable for you.
(ii) You are comfortable with selecting investment funds appropriate to your risk profile.
(iii) You want to buy a low-cost product.
(iv) You do not require financial advice.
If you feel that you satisfy these criteria you will be able to limit your costs to a single charge on the pension product of your choice. This should be no greater than a 1% annual charge on the value of your pension fund. As there is no contribution charge, 100% of any employer/employee payments are invested in the pension.
This service is not restricted to employers/employees that are affecting “new” pensions, it can also be used by those who already have a private pension and wish to transfer their existing pension funds or redirect future contributions.
You should not expect your bank to offer you this type of service on PRSA schemes, as they more-than-likely put a premium on their advice. The employee and employer could be paying (up to) a 5% charge on each payment that is remitted but they may be getting very little in the form of advice for this cost.
Even if the employer has an existing PRSA scheme in place, they should consider offering a low-cost option to those employees that have a good understanding of their financial needs.
Gerard Sheehy is a financial advisor for PRSAS. For more information log on to www.prsa.ie
The above article is in the Pension & Investment Supplement of the Septmeber 2010 Issue of Business & Finance
This is the Advertisement that accompanied the above text
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