Fund Costs - are these reasonable ?

Johnny Jukebox · 16-11-2006 8:57am #1

I want to set-up a retirement bond and have been quoted 1.95% of premium for set-up costs and 1.2% of fund value/per annum for management costs there after.

Are these reasonable ?

The set-up seems high to me, given that I did not need any advice on fund selection etc. What exactly does the set-up costs cover ?

sofireland · 16-11-2006 9:00am

Are you transferring out of a scheme?

That seems high alright, i recently transferred out to one and got 107% allocation on my investment, annual management charge is then 1-1.5% depending on fund, i've spread over a few.

Johnny Jukebox · 16-11-2006 9:25am

Yes I am.

Can you explain the 107% please ?

And does the set-up fee usually cover advice ? or is that considered a cost of sale ?

Thanks,

ps. I followed up your previous tip, thanks.

sofireland · 16-11-2006 10:24am

Well, basically i'm only 24 but i'm transferring 10k out of my pension into a Retirement bond, as i work in a broker, i'm writing the business myself, i'm taking it as nil commission. Normal allocation would be 105%, but commission is 2% so i'm not taking that. It means when they are buying the units in my selected funds, they are buying with €10,700 rather than 10000.

Some of the companies charge an entry fee, which is deducted from you're initial investment, i'm guessing if you followed my last tip, he's charging you that fee for placing the business execution only, but not actually taking commission from the relevent life company. You may want to check though.

The commission is what pays us for our advise, if he's taking that too, i'd look elsewhere. Though some broker's terms of business state they charge fees to arrange certain products

Fund Costs - are these reasonable ?

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