Financial advice

MrPicante

Hello, I'm looking for some financial advice recommendations on savings. I've noticed saving funds in the bank is all but useless in terms if return. Through research I've found 3 regular saving products from life companies. I appreciate these are 5 year plus products. I was wondering whether a) they were any good b) expensive c) compared to gov bonds. The fees seem high.

Also would going direct rather than broker offer any financial benefit?

Thanks

Brian

P_Cash

MrPicante wrote: »

Hello, I'm looking for some financial advice recommendations on savings. I've noticed saving funds in the bank is all but useless in terms if return. Through research I've found 3 regular saving products from life companies. I appreciate these are 5 year plus products. I was wondering whether a) they were any good b) expensive c) compared to gov bonds. The fees seem high.

Also would going direct rather than broker offer any financial benefit?

Thanks

Brian

If it's just savings, with little risk wanted, then I'd go with a National Solidarity Bond from the govrnment, open it up in ur post office

Remember while brokers will have your interest to heart, their first priority is making money

MrPicante

P_Cash wrote: »

If it's just savings, with little risk wanted, then I'd go with a National Solidarity Bond from the govrnment, open it up in ur post office

Remember while brokers will have your interest to heart, their first priority is making money

Thanks. Any advice on regular savers?

Bizness

MrPicante wrote: »

Thanks. Any advice on regular savers?

It might be better to specify what type of regular savings are they, are they cash or equities, property, bonds etc.
Even list the names of the products.
What are the charges, and I am not saying just the basic AMC - Annual Management Charge.

AMC cost< Total Expense Ratio cost (TER) < Total Cost of Ownership cost (TCO)
TCO is the one you need which details all charges, including portfolio rebalancing, dealing costs, bid-offer spreads, stamp duty etc.
If TCO is > 1% of portfolio per annum, avoid imo, you can replicate these savings plans with cheap index trackers or etf's, or else buy a basket of shares yourself and reinvest dividends.

If you want to keep your money in cash, an An Post bond or savings plan.

MrPicante

Bizness wrote: »

It might be better to specify what type of regular savings are they, are they cash or equities, property, bonds etc.
Even list the names of the products.
What are the charges, and I am not saying just the basic AMC - Annual Management Charge.

AMC cost< Total Expense Ratio cost (TER) < Total Cost of Ownership cost (TCO)
TCO is the one you need which details all charges, including portfolio rebalancing, dealing costs, bid-offer spreads, stamp duty etc.
If TCO is > 1% of portfolio per annum, avoid imo, you can replicate these savings plans with cheap index trackers or etf's, or else buy a basket of shares yourself and reinvest dividends.

If you want to keep your money in cash, an An Post bond or savings plan.

Thanks for info. There are two:

Zurich regular saver - LifeSave Savings Plus
Irish Life - pinnacle

Very little info on website, which is also a worry. Have requested fees. I believe it's a 1% annual management fee.

There's also a pretty exit penalty before year 5 - although this is a long medium term (5-10) year savings plan.

I would love to know whether these products are recommended or just too fat with fees to actually pay anything of value.

I'm also looking at ETFs - appreciate some recommendations.

Much appreciated.

Brian

Bizness

MrPicante wrote: »

I would love to know whether these products are recommended or just too fat with fees to actually pay anything of value.

I'm also looking at ETFs - appreciate some recommendations.

Much appreciated.

Brian

You are on the right track. Just fat with fees.
They will of course be recommended by brokers who get upfront and trailing commissions.

I quote Irish Life prospectus:
irishlife.ie/customer-service/breakdown-charges/pinnacle-charges

"
Yearly Management Charges (Note 1 & 2)

% Charge

Regular Contribution

0.75% - 1.5%

Single Contribution

0.75% - 1.5%

Note 1: These are the standard fund charges on this product. You may choose to invest in other funds with higher charges or where the charge could vary (for example if the fund is managed by an external manager (other than Irish Life Investment Managers). Our estimate of the maximum extra charge that could apply based on the funds currently available is 1.70%.
"

So an AMC of 0.75%-1.5%. Therefore a TCO probably of min 1.25% to 2.0%, with an additional charge by an external manager of 1.70% or perhaps more (if apply TCO principle to the external manager also) - rip-off charges - could be up to 3.7-4% pa.

There is no doubt also trailing commissions paid to broker throughout life of contributions, if you have to go through one to avail of this savings plan.

Excruciating exit charges.

With Zurich Lifesavings Plus a similar rip-off

zurichlife.ie/static/documents/SI_SP_CG/Customer_Guide.PDF?docTag=&docVer=5

Charges on page 4
Trailing commission on page 5.

WTF!
Prepared for a client paying an initial premium of €150 per month investing in the Zurich Life
funds. Looking at tables on page 4 for charges and table on page 5 for training commissions, the initial charge for yr 1 is 27.6%!!! and about 6% charges pa in subsequent years! It will take 6/7 yrs for you to break even on your contributions to date, and that assumes a per annum fund growth of 6%, which is highly ambitious in today's deflationary environment.

Avoid like the plague.

The Irish Central Bank, Financial regulator and ruling elites have a lot to answer for to allow this price gouging by Fund Managers. Ineptitude and in the fund manager's pockets.
Trailing commissions are an absolute scandal. (The UK Financial Regulators have banned commission based sales and trailing commissions in UK).

ETF's - Vanguard, Fidelity. Not sure if you can invest as a retail customer based in Ireland - you will need to check. Exit Tax is excruciating I believe for Irish residents - 41% on gains.

There are discussion on them here on boards or AAM.
Also Index trackers.

It is probably best to read some investment books or get some impartial advice if you are not very financially savvy or just starting out, e.g. even pay upfront to get advice from a good independent financial advisor who is not on the payroll of investment companies.

If you have a mortgage and on a variable or fixed APR, then pay this down first - best risk-free return you are likely to get is to pay down mortgage as soon as possible - there is a reason banks try to give you the longest mortgage term they can and that reason is compound interest.
Tracker - risk free is throwing into a cash savings account that pays out more interest (net of Dirt and USC) than your tracker charges in interest.

Perhaps based on your risk appetite, build up a portfolio of shares over the next number of years, and re-invest the dividends in more equities, e.g. a portfolio of 5-7 plus stocks to replicate various company sectors . On a 5-10 plus yr horizon, you will work out better than giving it to robbing fund managers.


Property also of course - the ruling elites always thinking of new schemes to pump up property prices and hence their own property portfolios.

Prezatch

Lots of helpful threads on ETFs (specific to Ireland and Irish tax rates) on askaboutmoney.com - the investments boards.

MrPicante

Bizness wrote: »

You are on the right track. Just fat with fees.
They will of course be recommended by brokers who get upfront and trailing commissions.

I quote Irish Life prospectus:
irishlife.ie/customer-service/breakdown-charges/pinnacle-charges

"
Yearly Management Charges (Note 1 & 2)

% Charge

Regular Contribution

0.75% - 1.5%

Single Contribution

0.75% - 1.5%

Note 1: These are the standard fund charges on this product. You may choose to invest in other funds with higher charges or where the charge could vary (for example if the fund is managed by an external manager (other than Irish Life Investment Managers). Our estimate of the maximum extra charge that could apply based on the funds currently available is 1.70%.
"

So an AMC of 0.75%-1.5%. Therefore a TCO probably of min 1.25% to 2.0%, with an additional charge by an external manager of 1.70% or perhaps more (if apply TCO principle to the external manager also) - rip-off charges - could be up to 3.7-4% pa.

There is no doubt also trailing commissions paid to broker throughout life of contributions, if you have to go through one to avail of this savings plan.

Excruciating exit charges.

With Zurich Lifesavings Plus a similar rip-off

zurichlife.ie/static/documents/SI_SP_CG/Customer_Guide.PDF?docTag=&docVer=5

Charges on page 4
Trailing commission on page 5.

WTF!
Prepared for a client paying an initial premium of €150 per month investing in the Zurich Life
funds. Looking at tables on page 4 for charges and table on page 5 for training commissions, the initial charge for yr 1 is 27.6%!!! and about 6% charges pa in subsequent years! It will take 6/7 yrs for you to break even on your contributions to date, and that assumes a per annum fund growth of 6%, which is highly ambitious in today's deflationary environment.

Avoid like the plague.

The Irish Central Bank, Financial regulator and ruling elites have a lot to answer for to allow this price gouging by Fund Managers. Ineptitude and in the fund manager's pockets.
Trailing commissions are an absolute scandal. (The UK Financial Regulators have banned commission based sales and trailing commissions in UK).

ETF's - Vanguard, Fidelity. Not sure if you can invest as a retail customer based in Ireland - you will need to check. Exit Tax is excruciating I believe for Irish residents - 41% on gains.

There are discussion on them here on boards or AAM.
Also Index trackers.

It is probably best to read some investment books or get some impartial advice if you are not very financially savvy or just starting out, e.g. even pay upfront to get advice from a good independent financial advisor who is not on the payroll of investment companies.

If you have a mortgage and on a variable or fixed APR, then pay this down first - best risk-free return you are likely to get is to pay down mortgage as soon as possible - there is a reason banks try to give you the longest mortgage term they can and that reason is compound interest.
Tracker - risk free is throwing into a cash savings account that pays out more interest (net of Dirt and USC) than your tracker charges in interest.

Perhaps based on your risk appetite, build up a portfolio of shares over the next number of years, and re-invest the dividends in more equities, e.g. a portfolio of 5-7 plus stocks to replicate various company sectors . On a 5-10 plus yr horizon, you will work out better than giving it to robbing fund managers.


Property also of course - the ruling elites always thinking of new schemes to pump up property prices and hence their own property portfolios.

Excellent information, thank you. This confirms my suspicions re: fees and charges. I actually thought there was something I just wasn't getting.

Anyhow, I've decided on a mix of euro stocks and ETF's for the long haul.

To be honest independent financial advice is very difficult to come by - commissions are criminal.