Rabodirect closing investment accounts from 24th April 2017

Atlantic Dawn

I see RaboDirect are closing all investment accounts on April 24th 2017, the account holder can either sell their funds before this or move over to Cantor Fitzgerald Ireland Limited...

https://www.rabodirect.ie/binaries/Investment_Account_Withdrawal_Information_2016.pdf

Francie Barrett

Goes to show how far we have come.

I remember when Rabo first started offering funds in Ireland about 10 years ago. From what I can remember, they were one of the first firms to really try to attract money in Ireland and were very popular. I signed up and invested some money in one of their green energy funds; 0.75% entry cost, 2% annual management fee and 0.75% exit cost. At the time I thought that was wonderful :pac:

daheff

thanks for the heads up


Bit of a pain to be honest...

anybody have any dealings with Cantor Fitz? are they expensive to deal with? do they have a good list of products on offer?

From sounds of it they will facilitate short term fee structure like Rabo, but i'm guessing its higher afterwards.

Might be a good time to close out my investments with Rabo for no exit cost At least thats one benefit- downside is taxable gain next year.

newacc2015

daheff wrote: »

thanks for the heads up


Bit of a pain to be honest...

anybody have any dealings with Cantor Fitz? are they expensive to deal with? do they have a good list of products on offer?

From sounds of it they will facilitate short term fee structure like Rabo, but i'm guessing its higher afterwards.

Might be a good time to close out my investments with Rabo for no exit cost At least thats one benefit- downside is taxable gain next year.

I would say just go for ETFs on Degiro. A lot of them are free and have low management fees. It makes far more sense in a low interest rate/low return enviroment to go for ETFs. There is also the fact that most of these 'managed funds' have horrific returns. A lot of banks sold funds that are worthless

If you want an actively managed fund, I would go for the EIIS scheme. You get tax relief for your investment and usually a return of 5% pa for your 4 year investment. It has risks, but you are guaranteed to at least get tax relief out of it and maybe your full investment plus capital gains

mrcheez

So advice here is to move the funds out from Cantor Fitz right?

Think I might just put the money toward an investment property at this stage

mrcheez

Actually looking for a bit of advice here if that's ok (I'll probably be chatting to a financial adviser next year anyway but just curious to get some initial suggestions)...

My overall profit is only around €3K when taking in the overall losses against profits on my funds.

Yet if I sell the actual profitable funds off the tax I pay will be about €10K ! ... so my gross balance will be about -€7K after taxes paid when it should "ideally" be around €1.5K after tax.

Can I offset the losses against the profitable funds so that my tax is actually on the €3K ?!?

topper_harley2

mrcheez wrote: »

Actually looking for a bit of advice here if that's ok (I'll probably be chatting to a financial adviser next year anyway but just curious to get some initial suggestions)...

My overall profit is only around €3K when taking in the overall losses against profits on my funds.

Yet if I sell the actual profitable funds off the tax I pay will be about €10K ! ... so my gross balance will be about -€7K after taxes paid when it should "ideally" be around €1.5K after tax.

Can I offset the losses against the profitable funds so that my tax is actually on the €3K ?!?

For 3k worth, I wouldn't bother with advisor. Fees will kill any profit.

If the funds are UCIT funds, you CANNOT offset losses/gains. This is why these funds suck. Funds in profit are subject to exit tax of 41% (note this is not CGT). Funds in loss are treated as a nil gain and is not offset. Also, there is eight year deemed disposal issue with these (search this site for more). Basically you're kinda screwed if the funds are UCIT unit linked funds.

mrcheez

erk... ok! Might leave some of the unprofitable funds in with Cantor Fitz then and see if they come back up

or... take the lot out and put it toward a rental property or something. Worry about it next year

Have to say though, it was nice of Rabo to give advanced warning.. I've dealt with places that give approx 1 month notice of changes like this.

.

Tom Dunne

Just looking for any further thoughts on this. I'm up approx. 7.5% overall, with a relatively modest amount invested. I use the "regular investor" mechanism where I put aside an amount each month.

I am in it for the long haul, I'm thinking minimum 5-10 years more. But I'm not sure what this new crowd are like, particularly in terms of fees.

newacc2015

Tom Dunne wrote: »

I am in it for the long haul, I'm thinking minimum 5-10 years more. But I'm not sure what this new crowd are like, particularly in terms of fees.

Fund Management Annual Management Fee 0.45% - 2.10% depending on the fund, Entry
Fee 0.75% and Exit Fee 0.75%) for 12 months from the date of transfer.

From the doc from OP. I think the fees are absurd in 2016. You might as well make a monthly direct debit to degiro and use their ETFs trading option. Some ETFs have management fees as low as 0.13% per year and there is no exit/entry fee.

We are in a period of low returns. Those management fees for funds who cant beat the market are insane

mrcheez

RaboDirect had no annual management fee is that right?

I don't recall paying anything annually although perhaps you pay it when you sell the fund.

Tom Dunne

mrcheez wrote: »

RaboDirect had no annual management fee is that right?

I don't recall paying anything annually although perhaps you pay it when you sell the fund.

I don't think they charge yearly, at least I have never been charged.

mrcheez

Tom Dunne wrote: »

I don't think they charge yearly, at least I have never been charged.

So going with Cantor Fitz will now mean we need to pay out a fee every year?
Yikes.

Even on my unprofitable funds?

I was planning on leaving them with Cantor Fitz until they rise up a bit before I remove them (but remove the profitable funds now and avoid the Exit Fee).

Tom Dunne

mrcheez wrote: »

So going with Cantor Fitz will now mean we need to pay out a fee every year?
Yikes.

Even on my unprofitable funds?

I was planning on leaving them with Cantor Fitz until they rise up a bit before I remove them (but remove the profitable funds now and avoid the Exit Fee).

Yup. And according to Cantor Fitz website fees are 1% plus VAT or a minimum of €250, whichever is greater. That's me out. I think they are not interested in small investors like me.

mrcheez

*choke*

thanks for the update, haven't had a chance to read the small print yet

JTMan

Tom Dunne wrote: »

I don't think they charge yearly, at least I have never been charged.

You are not charged management fees per se. Management fees, and other fees, are built into the price of the fund. The price (value) of the fund is after the accrual of fees.

mrcheez

Offloaded the first losing fund now which I had planned on keeping till the losses were more like only 20%, or (God forbid) it actually became profitable, but it was at 47% less than initial investment and looked to be continuing on the downtrend so got out before it got worse. There was no way I was going to keep it and pay €250 per year with Cantor Fitz waiting for it to rise up again.

Currently I'll end up around €3K less overall after DIRT take their cut and allowing for losses on initial investments, so going to hold onto the funds that seem to be doing well up until March and who knows I may actually end up with a marginal profit of a couple of euro out of it!

I did have other Rabo funds that made decent profits which I used towards a house purchase a few years ago, so it wasn't a total waste of time!

irish_investr

Hi all,
When do rabo customers need to decide what to do?

My advice on this would be to wait it out as long as possible. Rabo leaving creates an interesting gap in the market, and I wouldn't be at all surprised if someone stepped in in March with a better deal than the local brokers.

I have featured rabo previously on my site and recommended them as a funds broker. They have been doing business in Ireland the way fund brokers do business in other countries - as opposed to the local Irish brokers who are ridiculously expensive. Experience from other countries shows that there could/should be no fees associated with fund trading (or having an account), apart from the management fees baked into the NAV. Obviously, this relies on having enough volume so that the broker can generate revenue via kickbacks. Sufficient volume of trade and investment is sadly lacking in Ireland, in part due to taxation.

Funds are a great way for individuals to save and invest for long and short term, but Revenue and brokers need to support it. Rabo behaved well towards investors but the government is backward regarding supporting individuals who want to save and invest. In hope/anticipation of a change in tax policy, now might be a great time for another player to step into the Irish market and claim a near 100% market share of fundbrokerage business (outside of pension "schemes", of course).

Had I myself been a rabo customer in Ireland, I would sell off the funds and go to ETFs unless another fundsbroker comes into the market. The fees charged by local Irish brokers are not worth it. They are a rip off, especially for smaller investors.

Tom Dunne

I currently have two funds with Rabo, both averaging 7.5% since I started a few years back. I'm thinking of letting the two of them transfer over to Cantor Fitz for the 1 year, where (a) Rabo fees still apply and (b) hopefully, they will continue the growth. Then I will pull out in April 2018.

In the mean time, I've realised that I am surrounded by personal tax experts and people with good knowledge of the financial industry. So I'll be spending the next while researching DeGiro and ETFs, among other things.

mrcheez

Tom Dunne wrote: »

In the mean time, I've realised that I am surrounded by personal tax experts and people with good knowledge of the financial industry. So I'll be spending the next while researching DeGiro and ETFs, among other things.

Do these ETFs require a lot of time and research? Any info you gather would be great to share here for part-timers like myself.

I had more time when I originally purchased my Rabo funds and have done pretty well out of them over the 10 years (approx 10-12K more than if I had just left it in a high-interest account) ... but barely have time to put on the washing nowadays, so doubt I'll be able to dedicate a few days to investigating ETFs before April :rolleyes:

Tom Dunne

mrcheez wrote: »

Do these ETFs require a lot of time and research? Any info you gather would be great to share here for part-timers like myself.

Yeah, they do. Hence my thinking on leaving the Rabo funds for the year with Cantor Fitz. No point rushing into things.

I would be delighted to share any info I get with you.

Nody

To the two of you there's a discussion here on the subject on how to invest with minimal knowledge; now not all agree but it does give some various input to start with and of course a book like The Elements of Investing by Malkiel, Burton G. Takes less than 2h to complete but cover the bases on why diversification and index funds is your best long term investment.

Honestly it's not complicated and by going for the principal of cheapest and broadest possible index funds (Vanguard being cheapest on the market in general) with once a year rebalancing you'll not really be to far off the ball. Yes you can possibly get another 5% beyond an index fund but that will require more risk, a lot more knowledge and time commitment by comparison. Which is why Buffet said 95% of people should invest in index funds

mrcheez

176 pages in 2 hours. Sounds like a challenge

Thanks will look into it

Nody

mrcheez wrote: »

176 pages in 2 hours. Sounds like a challenge

Thanks will look into it

If it was a normal book size I'd agree but you'd fit about 4 pages in the book to one normal page in a normal sized book.

Tom Dunne

mrcheez wrote: »

176 pages in 2 hours. Sounds like a challenge

Thanks will look into it

Pffft. I finished Bruce Springsteen's book (500+ pages) over the Christmas.

Great info, thanks Nody.

mrcheez

mrcheez wrote: »

Offloaded the first losing fund now which I had planned on keeping till the losses were more like only 20%, or (God forbid) it actually became profitable, but it was at 47% less than initial investment and looked to be continuing on the downtrend so got out before it got worse. There was no way I was going to keep it and pay €250 per year with Cantor Fitz waiting for it to rise up again.

Currently I'll end up around €3K less overall after DIRT take their cut and allowing for losses on initial investments, so going to hold onto the funds that seem to be doing well up until March and who knows I may actually end up with a marginal profit of a couple of euro out of it!

I did have other Rabo funds that made decent profits which I used towards a house purchase a few years ago, so it wasn't a total waste of time!

Popped onto Rabodirect to see if the fund sale had gone through, and see that it still hasn't but that the fund I was selling went up another €488 today in a freak rare occurrence (it had generally been dropping over the past few months). So I get an extra €488 in my pocket.

A win for the little guy.

It's actually higher than it's ever been since Rabodirect announced their withdrawal.

newacc2015

Tom Dunne wrote: »

Yeah, they do. Hence my thinking on leaving the Rabo funds for the year with Cantor Fitz. No point rushing into things.

I would be delighted to share any info I get with you.

There is honestly not that much research to do with ETFs. They are generally all passively managed ie they piggy back on the expertise of the market that is you assume the market is efficient. Most would argue you can't beat the market, so just invest in the market ie an index fund. ETFs are literally free riding on the decent stock picking of others.

Degiro have a ton of free iShares and Vanguard ETFs which easily have a majority of the ETF market in the US. Their management fees are as low as 0.05% per year. When you consider ETFs if based and managed in the US, are taxed like shares for CGT and you have €1,270 tax free per year.

IMO there is little to research on ETFs. They are ultra transparent ie iShare will generally give you a break down of what is in an ETF and where the money is invested eg their MSCI World ETF

https://www.ishares.com/us/products/239696/ishares-msci-world-etf

Bloomberg and the wall street journal cover ETFs heavily as they are massive in the US at the moment. Even people like George Soros uses them and that says a lot

mrcheez

As if it was feeling the end is nigh, my Digipass battery has decided to start dying this week.

Getting a replacement is free correct? No mention of a charge on https://www.rabodirect.ie/more/help/digipass.aspx

Tom Dunne

mrcheez wrote: »

As if it was feeling the end is nigh, my Digipass battery has decided to start dying this week.

Getting a replacement is free correct? No mention of a charge on https://www.rabodirect.ie/more/help/digipass.aspx

Yup, its free.

mrcheez

mrcheez wrote: »

Popped onto Rabodirect to see if the fund sale had gone through, and see that it still hasn't but that the fund I was selling went up another €488 today in a freak rare occurrence (it had generally been dropping over the past few months). So I get an extra €488 in my pocket.

A win for the little guy.

ffs it's still rising... gone up another €340 after I sold it off... this actually typifies my experience with this fund :pac:

If I buy into it, it's guaranteed to drop

Tom Dunne

mrcheez wrote: »

ffs it's still rising... gone up another €340 after I sold it off... this actually typifies my experience with this fund :pac:

If I buy into it, it's guaranteed to drop

Yup. Exact same with me - I sold a load of shares last year and when I checked yesterday, they had gone up by about 15%.

mrcheez

Apparently there's a "good feeling" on the markets with Trump coming into power (all my other bad performing funds are on the rise as well).

Of course when they realise what a hash he's going to make of it the markets will probably drop around Mar/Apr so I think you have a good idea to hold onto the rest of the funds until the last days that Rabodirect are involved.

newacc2015

mrcheez wrote: »

Apparently there's a "good feeling" on the markets with Trump coming into power (all my other bad performing funds are on the rise as well).

Of course when they realise what a hash he's going to make of it the markets will probably drop around Mar/Apr so I think you have a good idea to hold onto the rest of the funds until the last days that Rabodirect are involved.

You are better taking them out now. Pay the tax and put the money into an S&P500 ETF on degiro where you will buy zero fees for buying the ETF. Plus your first €1,270 capital gain is tax free this year. Where as you keep it in the Rabo fund, you pay a ton of tax and even if your bet is wrong, you dont have a capital loss to carry over to your next investment

Here is a decent article if anyone think the rabo funds are value:

http://www.wsj.com/articles/its-time-for-investor-fees-to-go-even-lower-1483739505

mrcheez

I'll move them into ETFs once I get time to read up on them and research... booked up solidly for next month or so though, so leaving them in Rabo for now

Tom Dunne

newacc2015 wrote: »

Here is a decent article if anyone think the rabo funds are value:

http://www.wsj.com/articles/its-time-for-investor-fees-to-go-even-lower-1483739505

But it's all relative, isn't it?

As a novice investor, Rabo funds were ideal for me - easy to set up, clear, unambiguous information. So while I admit to paying a premium for that simplicity, for me, it was worth it.

cider

A quick question, can I claim the 1270 capital gains tax allowance on profit on rabo funds? Or is all the profit taxed at 41%?

mrcheez

cider wrote: »

A quick question, can I claim the 1270 capital gains tax allowance on profit on rabo funds? Or is all the profit taxed at 41%?

I'd be interested in knowing this too, I have paid tax on Rabodirect funds sold previously but didn't exempt any of it.

I entered the figures into ROS on my Form 11 and I'm guessing that would normally include the 1,270 if I was eligible, so the fact it wasn't added probably means that no tax allowance is given on Rabodirect funds.

Or is the exemption a new thing for funds sold this year onwards?

mrcheez

mrcheez wrote: »

I'd be interested in knowing this too, I have paid tax on Rabodirect funds sold previously but didn't exempt any of it.

I entered the figures into ROS on my Form 11 and I'm guessing that would normally include the 1,270 if I was eligible, so the fact it wasn't added probably means that no tax allowance is given on Rabodirect funds.

Or is the exemption a new thing for funds sold this year onwards?

Actually which forum is the best place to post this question?

I think there's a Talk to RaboDirect... might be better? EDIT .. at least there used to be... I might just post the question directly to Rabodirect

linnebet

Does anyone know how I can contact Rabodirect? I have lost the packet with all my Rabo details and my Digipass in it and need to find out whether my account is secure. I am blue in the face from ringing them, and have held on for up to 43 minutes. Their voicemail box is full, I emailed several times and they will get back in "a couple of days". I know they are shutting down and their customers’ opinions are no longer important to them but this is ridiculous. Any advice appreciated.

Sabre Man

linnebet wrote: »

Does anyone know how I can contact Rabodirect? I have lost the packet with all my Rabo details and my Digipass in it and need to find out whether my account is secure. I am blue in the face from ringing them, and have held on for up to 43 minutes. Their voicemail box is full, I emailed several times and they will get back in "a couple of days". I know they are shutting down and their customers’ opinions are no longer important to them but this is ridiculous. Any advice appreciated.

Here's their contact form:
https://www.rabodirect.ie/contact-us/default.aspx?shortURL=/contactus