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Pension - Broker Fee

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  • 05-11-2021 1:17pm
    #1
    AnswerIs42
    Registered Users Posts: 216 ✭✭


    I'd imagine this has been asked before but I can't find anything in the search.

    I'm looking to get independent advice on why should I continue to pay a broker fee after the pension is setup?

    In my case, my broker setup a fund with Zurich. The fee was 1.25% with 0.5% going to the broker. Fair enough for the first year but now I'm wondering why I am paying this fee every year when I have no contact with the broker at all.

    I'd imagine when I ask the broker, they'll spin me a yarn about how hard they are working behind the scenes but as far as I can tell, there is nothing for them to do after the pension is setup. Am I wrong in that assumption?

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    #2
    Geuze
    Registered Users Posts: 13,145 ✭✭✭✭Geuze


    Typically, brokers get paid annually out of the AMC.

    I don't think it's true that there is zero work to do after set-up.


    If you're not happy, use a broker who offers a lower AMC.



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    #3
    AnswerIs42
    Registered Users Posts: 216 ✭✭AnswerIs42


    https://www.boards.ie/discussion/comment/118123018#Comment_118123018

    If there is work to do after the initial setup, then fair enough, I can see the need for a fee. I'll try and get a solid answer on what it is they do for the fee



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    #4
    Jim2007
    Moderators, Business & Finance Moderators Posts: 10,065 Mod ✭✭✭✭Jim2007


    https://www.boards.ie/discussion/2058216581/pension-broker-fee

    My experience is on mainland Europe, but I expect it is not very different to Ireland...

    First the products (pension funds) are priced in a certain way, it is done in such a way that the broker gets their fee over the period. Some brokers at least in mainland Europe do offer a fixed fee setup but it is very considerably higher.

    It would be wrong to assume that fund administrators and managers never make mistakes both in investment execution, fee calculation etc.... so some monitoring is required. How much monitoring your broker is doing I have no idea, but I have seen setups where brokers are loading in the raw data and doing parallel calculations to check what is going on.

    The best thing to do is ask the broker what you are paying for.



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    #5
    The J Stands for Jay
    Registered Users Posts: 5,678 ✭✭✭The J Stands for Jay


    This is something you should have sorted out with the broker at the start. The likes of Zurich have their own product charges, but whatever you agree with the broker is added to those charges.

    It's possible to get the broker to agree to an initial comission charge, and then nothing after that. This would leave you with no ongoing advice after the initial setup.



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