Looking for advice.

Summertime12345

I hope I'm on the correct thread. I'm looking to invest in AVCs and possibly bonds I seen a company called expertadvice.ie they are supposed to give impartial advice? Has anyone heard anything about them? They are based in Maynooth. I'm hoping to top up my pension I work for the HSE and I've been told the pension with them is ****e so now I'm panicking I'm 45 and I'd love to retire in 15 years. I have worked with them for a long and painful 20years. Any help and advice would be greatly appreciated.

Geuze

Summertime12345 wrote: »

I hope I'm on the correct thread. I'm looking to invest in AVCs and possibly bonds I seen a company called expertadvice.ie they are supposed to give impartial advice? Has anyone heard anything about them? They are based in Maynooth. I'm hoping to top up my pension I work for the HSE and I've been told the pension with them is ****e so now I'm panicking I'm 45 and I'd love to retire in 15 years. I have worked with them for a long and painful 20years. Any help and advice would be greatly appreciated.

The PS pension is not "****e".

First of all, establish how much PS pension you expect to get.

It seems you will have 35 years service at age 60?

Therefore, calculate your expected work pension based on that, for a start.

athlone573

Geuze wrote: »

The PS pension is not "****e".

First of all, establish how much PS pension you expect to get.

It seems you will have 35 years service at age 60?

Therefore, calculate your expected work pension based on that, for a start.

The broker commission rates on private pensions are significant.

AVC's can be a great way to save tax, and company pensions generally have low fees.

Public sector pensions are complicated.

That's about as much as I know, just be very careful with what brokers tell you, I know everyone has to make a living and the sector is regulated, but still, be careful.

Jim2007

I work for the HSE and I've been told the pension with them is ****e so now I'm panicking I'm 45 and I'd love to retire in 15 years. I have worked with them for a long and painful 20years. Any help and advice would be greatly appreciated.

The first rule in finance is to deal in facts not opinions and gut feelings. Doing otherwise will almost always lead to the wrong conclusion.

You won’t know if you’ll be able to retire in 15 years time unless you do the math. You need to figure out roughly how much you will spend on average each year in retirement and how much your pension will be and reach a conclusion if you are saving enough or not. Only then should you consider financial products to help you achieve your goal.

fits

I’d say pay for financial advice from a financial planner. It might seem expensive but will save a lot more in the long run.

maestroamado

Before you get any advise have a good look yourself.
The one thing you need to remember is any saving you make in tax when adding will be taxed when you start to draw down the pension.
With private pensions we can draw down 25% tax free, i do not know if same applies to public service.
Personally i think with AVCs you will be able to add without any advice....

Henry Ford III

athlone573 wrote: »

The broker commission rates on private pensions are significant....

How significant exactly?

athlone573

Henry Ford III wrote: »

How significant exactly?

Well if you take out a private pension I think they have to give you a letter disclosing their costs but it's not something I'm qualified to advise on. Just saying there may be better value in topping up a company pension with AVC's in some cases.

thebiggestjim

Henry Ford III wrote: »

How significant exactly?

Enough to decimate your pension, typical example below:

https://hermoney.ie/charges/

(Note: There is no gender bias here, I just happened to look at this advisor recently as there was an article with the founder in the paper recently. All pension advisors charge these types of fees.)

Defined Contribution Pension

Product Initial % Recurring Commission % Clawback Period (Months)
Regular Premium pension 20% 1% 48
Single premium pension 5.25% 1% -



Approved Retirement Fund (ARF) & Approved Minimum Retirement Fund (AMRF)

Product Initial % Recurring Commission %
ARF 5.25% 1%

Jim2007

athlone573 wrote: »

Well if you take out a private pension I think they have to give you a letter disclosing their costs but it's not something I'm qualified to advise on. Just saying there may be better value in topping up a company pension with AVC's in some cases.

You know the point I made about dealing in facts not opinions...

athlone573

Jim2007 wrote: »

You know the point I made about dealing in facts not opinions...

Not being smart no I don't as I don't read this forum regularly

Better to pay for professional advice than to rely on what someone says on a forum.

Jim2007

thebiggestjim wrote: »

Enough to decimate your pension,

Quoting a bunch of figures does not even come remotely close to answering the question being asked. Fees play a part, but so does performance and asset allocation just to mention a few and of course a comparison of the alternatives none of which is present in your answer.

I never worked as an advisor so I don’t know the ins and outs of that area, but I have managed money and spent a significant amount of time working on performance attribution. And to my mind keeping the fees low amounts to paying for average or below average performance and does not represent the best outcome you could have achieved.

I retired at 55 and let someone else manage my funds. I pay around 2% for an annualized return of around 17%. With the general consensus return on equities being around 8% and my own annualized return over a thirty year period being around 14%, I’d say it is worth paying the extra.

Jim2007

athlone573 wrote: »

Not being smart no I don't as I don't read this forum regularly

Better to pay for professional advice than to rely on what someone says on a forum.

But the problem is that people do take what they read here and act on it. And when you make statements like:

The broker commission rates on private pensions are significant.

And then roll them back...

Decisions on pension funding can have serious long term consequences for people and should be held to a higher standard than many of the other topics we discuss here.

Jim2007

So far I don’t think this discussion is very helpful to the OP as we don’t even know what 45 years service might bring in terms of a pension!

Anyone know the HSE pension system and can run the numbers to give the OP a feel for what is in his future?

brownbinman

I'm civil service and wife is a teacher. We discussed AVCs with Cornmarket and would strongly recommend speaking to them

athlone573

Jim2007 wrote: »

But the problem is that people do take what they read here and act on it. And when you make statements like:



And then roll them back...

Decisions on pension funding can have serious long term consequences for people and should be held to a higher standard than many of the other topics we discuss here.

Not rolling back at all!

Commission and fees can make a significant difference to returns.

Expert advice can and should be sought. All we can do here is suggest some areas to consider in more detail, fees being just one part of the picture, alongside tax, attitude to risk, etc etc.

thebiggestjim

Jim2007 wrote: »

Quoting a bunch of figures does not even come remotely close to answering the question being asked.

I was answering the question asked by Henry Ford which was specifically about broker commissions. The Irish pension industry love to downplay costs which have an outsized negative impact on a savers final pension pot. A fee of 1% per annum reduces your return by 1% every year, which compounds to a lot of money over a long period of time.

Jim2007 wrote: »

I never worked as an advisor so I don’t know the ins and outs of that area, but I have managed money and spent a significant amount of time working on performance attribution.

So how did you manage other peoples money without being an advisor? Did they just give you money no questions asked?

Jim2007 wrote: »

And to my mind keeping the fees low amounts to paying for average or below average performance and does not represent the best outcome you could have achieved.

You sound like you still work in the industry or are closely related to someone who does

Jim2007 wrote: »

I retired at 55 and let someone else manage my funds. I pay around 2% for an annualized return of around 17%. With the general consensus return on equities being around 8% and my own annualized return over a thirty year period being around 14%, I’d say it is worth paying the extra.

Congratulations but I have little faith in what you are saying

To Henry Ford and the OP my point to you which I hope you find helpful is that costs are a very significant negative impact on your pension and savings. You should do everything you can to reduce them. Irish pension brokers and industry professionals will do everything they can to downplay and hide their fees. They have practiced their answers on fees a lot.

killbillvol2

Jim2007 wrote: »

So far I don’t think this discussion is very helpful to the OP as we don’t even know what 45 years service might bring in terms of a pension!

Anyone know the HSE pension system and can run the numbers to give the OP a feel for what is in his future?

Not enough detail in the OP but if they started in 2001 they should be on the old public service pension scheme which basically is half salary (40/80) after 40 year's service and 1.5 times salary (120/80) in a lump sum.

Assuming 35 year's service at age 60 that would give a pension of 35/80 of final salary. For simplicity let's put final salary at €80,000 - pension would be €35,000 with a lump sum of €105,000.

There are so many grades/conditions etc. in the HSE though that none of that might be relevant.

killbillvol2

thebiggestjim wrote: »

I was answering the question asked by Henry Ford which was specifically about broker commissions. The Irish pension industry love to downplay costs which have an outsized negative impact on a savers final pension pot. A fee of 1% per annum reduces your return by 1% every year, which compounds to a lot of money over a long period of time.



So how did you manage other peoples money without being an advisor? Did they just give you money no questions asked?



You sound like you still work in the industry or are closely related to someone who does



Congratulations but I have little faith in what you are saying

To Henry Ford and the OP my point to you which I hope you find helpful is that costs are a very significant negative impact on your pension and savings. You should do everything you can to reduce them. Irish pension brokers and industry professionals will do everything they can to downplay and hide their fees. They have practiced their answers on fees a lot.

So we should take your opinion, backed up by hermoney.ie, over that of someone who's spent years working in the industry?

Henry Ford III

thebiggestjim wrote: »

Enough to decimate your pension, typical example below:

https://hermoney.ie/charges/

(Note: There is no gender bias here, I just happened to look at this advisor recently as there was an article with the founder in the paper recently. All pension advisors charge these types of fees.)

Defined Contribution Pension

Product Initial % Recurring Commission % Clawback Period (Months)
Regular Premium pension 20% 1% 48
Single premium pension 5.25% 1% -



Approved Retirement Fund (ARF) & Approved Minimum Retirement Fund (AMRF)

Product Initial % Recurring Commission %
ARF 5.25% 1%

Do you think 20% initial commission (of the first years premium only) plus a small renewal is enough to "decimate" a pension? It's not.

Have you any idea what commission rates were for a PPP say in the late 1980's? Most of these policies have matured by now and the better ones are yielding excellent returns.

That 20% btw is the maximum commission and a broker will often take less if the premium is big enough, or will charge a fee, or even an offset arrangement of some sort. As I've said before all fees charged and commissions must be disclosed.

You could pay an annual fee to your advisor but at say €150 or more per hour that could get expensive year after year.

You could also go to a discount broker and pay reduced fees but with no advice. I've picked up the pieces of far too many people who've taken this route and ended up disappointed.

There are some very good and experienced advisors out there who are well worth whatever they cost.

Henry Ford III

athlone573 wrote: »

Not rolling back at all!

Commission and fees can make a significant difference to returns.

Expert advice can and should be sought. All we can do here is suggest some areas to consider in more detail, fees being just one part of the picture, alongside tax, attitude to risk, etc etc.

Expert advice isn't free either.

Henry Ford III

thebiggestjim wrote: »

I was answering the question asked by Henry Ford which was specifically about broker commissions. The Irish pension industry love to downplay costs which have an outsized negative impact on a savers final pension pot. A fee of 1% per annum reduces your return by 1% every year, which compounds to a lot of money over a long period of time.



So how did you manage other peoples money without being an advisor? Did they just give you money no questions asked?



You sound like you still work in the industry or are closely related to someone who does



Congratulations but I have little faith in what you are saying

To Henry Ford and the OP my point to you which I hope you find helpful is that costs are a very significant negative impact on your pension and savings. You should do everything you can to reduce them. Irish pension brokers and industry professionals will do everything they can to downplay and hide their fees. They have practiced their answers on fees a lot.

Please provide some evidence to substantiate these sweeping claims.

athlone573

Henry Ford III wrote: »

Expert advice isn't free either.

Did I say it was?

I think we're going round in circles here discussing the best remuneration model for financial intermediaries rather than providing useful advice to the OP.

Many people are fortunate enough to have a company pension with low fees which they can top up with AVC's and that should definitely be considered, although being a public sector employee makes this more complicated.

killbillvol2

athlone573 wrote: »

Many people are fortunate enough to have a company pension with low fees which they can top up with AVC's and that should definitely be considered, although being a public sector employee makes this more complicated.

You literally have no idea what you're talking about.

Please explain what's complicated about AVCs for public sector employees?

Jim2007

thebiggestjim wrote: »

So how did you manage other peoples money without being an advisor? Did they just give you money no questions asked?

Who do you think manages the funds that advisors recommend you invest in for example?

You sound like you still work in the industry or are closely related to someone who does

Well of course I know lots of people in the industry and more importantly I know an awful lot about their abilities or lack there of since performance attribution is what I concentrated on.

Congratulations but I have little faith in what you are saying

Just because you don’t know about well managed funds does not mean they don’t exist. Not a recommendation, but an example: FundSmith and there are several others out there as well so long as you don’t filter purely on low fees.

Now we’re still waiting on concrete comparisons from you.

Jim2007

killbillvol2 wrote: »

Not enough detail in the OP but if they started in 2001 they should be on the old public service pension scheme which basically is half salary (40/80) after 40 year's service and 1.5 times salary (120/80) in a lump sum.

Assuming 35 year's service at age 60 that would give a pension of 35/80 of final salary. For simplicity let's put final salary at €80,000 - pension would be €35,000 with a lump sum of €105,000.

There are so many grades/conditions etc. in the HSE though that none of that might be relevant.

Thanks for that. I also found this page, which has a like the OP can use to request an estimate: https://healthservice.hse.ie/staff/benefits-services/pensions/pension-estimator.html

Before the OP does anything else he needs to get a handle on what his situation actually is.

athlone573

killbillvol2 wrote: »

You literally have no idea what you're talking about.

Please explain what's complicated about AVCs for public sector employees?

The option to buy years instead, which private sector don't have (not saying that all public sector do either)

You seem very defensive about it.

I'm saying that the OP (If he or she decides their existing pension isn't sufficient) should consider all the options possible which might include AVC's, buying years, or some other means. If I just walk into a broker off the street I assume that they'll push me towards the choice that pays the highest commission, same as any other type of salesman.

There is some info here :
https://www.pensionsauthority.ie/en/trustees_registered_administrators/checklists_and_guides/

Alan152

Financial brokers in Ireland are required to disclose the maximum commissions available to them across the market through the available life companies and place this on their website.
If company x pays 5% commission but company y pays 6% commission, the broker is required to put up to 6% for that product on their website. It’s not saying the broker will indeed charge that for that specific product or piece of advice.
It’s to make the buyer beware and understand the potential that could be charged.
AvCs and the public sector pension schemes are quite complicated and depending on when you entered service, you scheme may be different to someone who entered the same job 5 or 10 years before you.

You get what you pay for in life and good advice will be worth it in the end. I recently has an attic conversion completed where the builders profit margin was circa 30%. People are running business to make money. Financial advisors are no different . There’s good advice and bad advice, try and get a recommendation of a good advisor

Henry Ford III

athlone573 wrote: »

.....If I just walk into a broker off the street I assume that they'll push me towards the choice that pays the highest commission, same as any other type of salesman.....

That's both incorrect and misleading too.

If a Broker makes a recommendation they are obliged to provide a "reasons why" letter as well as all the other disclosure requirements.

The principle of "Best Advice" applies too.

Please don't assume anything or particularly post anything beyond your level of knowledge here in the future.

Summertime12345

I do apologise I didn't mean to upset you. I don't actually know what my pension is going be like I'm just going on what other staff members have told me.

Henry Ford III

Summertime12345 wrote: »

I do apologise I didn't mean to upset you. I don't actually know what my pension is going be like I'm just going on what other staff members have told me.

One of the biggest positives of being in the HSE scheme is that it's a defined benefit arrangement - where your pension is based on salary and service. There's no investment risk.

Your in house administrators will tell you exactly what amount of pension you'll be due - just ask them.

killbillvol2

Summertime12345 wrote: »

I do apologise I didn't mean to upset you. I don't actually know what my pension is going be like I'm just going on what other staff members have told me.

Have a look at your payslip. Pension deductions should be listed. If you're on the old public service pension there are probably three deductions. 5% pension, 1.5% (used to be called Spouse's and Orphan's) and another Pension Related Deduction that varies. If you're in that pension scheme your pension is basically half salary after 40 year's service.

Jim2007

Summertime12345 wrote: »

I do apologise I didn't mean to upset you. I don't actually know what my pension is going be like I'm just going on what other staff members have told me.

Read posts 18 and 26, start by getting a handle on what your pension is likely to be.

athlone573

Henry Ford III wrote: »

That's both incorrect and misleading too.

If a Broker makes a recommendation they are obliged to provide a "reasons why" letter as well as all the other disclosure requirements.

The principle of "Best Advice" applies too.

Please don't assume anything or particularly post anything beyond your level of knowledge here in the future.

Ok

I am sensing the pro broker attitude from the mods so happy to take a step back.

Just one point before I go - it would be educational if someone would care to comment about "buying years" on PS pensions.

Geuze

Summertime12345 wrote: »

I do apologise I didn't mean to upset you. I don't actually know what my pension is going be like I'm just going on what other staff members have told me.

Go ahead and estimate your work pension.

Henry Ford III

athlone573 wrote: »

Ok

I am sensing the pro broker attitude from the mods so happy to take a step back.

Just one point before I go - it would be educational if someone would care to comment about "buying years" on PS pensions.

No that's not the case.

You're welcome to post here but just please don't be making sweeping statements which are factually incorrect. That's less than helpful.

The same applies to everyone by the way - not just you.

p.s. Buying added years can be a great idea. Like every consideration individual circumstances will determine how good or otherwise that idea actually is.

Jim2007

athlone573 wrote: »

I am sensing the pro broker attitude from the mods so happy to take a step back.

If you were to take anything away from this experience it should that many of your assumptions are poor at best and definitely not something you’d want to base your future financial well being on.

And this one is also wrong with respect to myself as I’m of the opinion the much of what passes for good financial advice in Ireland is fundamentally flawed. But that is a topic for another day.

KaneToad

Geuze wrote: »

The PS pension is not "****e".

First of all, establish how much PS pension you expect to get.

It seems you will have 35 years service at age 60?

Therefore, calculate your expected work pension based on that, for a start.

At the lower grades your final pension will not be much better than the 'state' pension. You will get a lump-sum though.

The J Stands for Jay

Jim2007 wrote: »

And this one is also wrong with respect to myself as I’m of the opinion the much of what passes for good financial advice in Ireland is fundamentally flawed. But that is a topic for another day.

This paragraph sums up the source of a lot of disagreements on this forum. There are excellent advisors working in the industry in Ireland, but there are also a large number which I would describe as salesmen. Thankfully, their number has reduced massively over the years, but they have left a lot of people with a bad impression of the industry.

Summertime12345

Thanks for the advice I really appreciate it��

AndrewJRenko

athlone573 wrote: »

The option to buy years instead, which private sector don't have (not saying that all public sector do either)

athlone573 wrote: »

Ok

I am sensing the pro broker attitude from the mods so happy to take a step back.

Just one point before I go - it would be educational if someone would care to comment about "buying years" on PS pensions.

Buying additional years isn't great value these days. You'll probably be better off putting the equivalent cash into an AVC. It also gives you the advantage of not having all your pension eggs in one basket (government, or more specifically, future government).