# Irish Life change notice period for fund switch



## Ask the dog (26 May 2008)

Hi all,
I have a large amount of my pension invested in Irish Life's property fund.
In early March I requested a switch out of this fund as it has begun to fall significantly. Since Feb/March 08 to present it has lost roughly 10% of it's value. Previously there were no restrictions with regard to minimum notice required to switch into or out of this fund - It was possible to make a fund switch from the date they received written instruction to do so. 
So, imagine my dissapointment when I was told that the criteria had changed and I would now have to give 6 months notice of any fund switch out of the property fund. So, by the time I become eligible to switch out of the fund (September 08) it will probably have lost about 25% of it's value. I was told that the new criteria came into effect on 15th Feb, approximately 2 weeks after I requested my switch.

No communication was given to me or other customers regarding this change in criteria  - I only found out because I tried to get my money out of the fund. 
My question is this - are pension providers not obiliged to communicate in writing any changes which effect their customers investments ? If there is a new lock in period of 6 months then should customers not be notified 6 months in advance ? After all I am paying them a fee to manage my pension fund and one would think they would like to see my investment rise not fall ?


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## vandriver (26 May 2008)

As this is a property fund which of its nature would be quite illiquid,surely advising policy holders of the new 6 month notice period would have triggered a run on the fund forcing irish life to sell properties at bargain basement prices to provide the money for redemtions exacerbating the fall in the funds value


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## Ask the dog (26 May 2008)

Yes, what you say is true. However, there must have been major movement out of the fund already for them to implement this new clause in the first place. I will suffer falling fund value for 6 months - why should Irish Life not suffer a little also ? I am sure they can absorb any such losses better than I can.


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## Cobra (27 May 2008)

I have two policies like this with irish life. Got no choice but to leave money . I will never  again invest with irish life, now i know i would be far better off lodging my money in a deposit account at 5% but i have learned from my mistakes.hurray.


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## LDFerguson (27 May 2008)

Ask the dog said:


> Yes, what you say is true. However, there must have been major movement out of the fund already for them to implement this new clause in the first place. I will suffer falling fund value for 6 months - why should Irish Life not suffer a little also ? I am sure they can absorb any such losses better than I can.


 
It's not a new clause.  Irish Life provided details of it in the point-of-sale terms and conditions of their property fund.  It has been invoked and removed before.

A property fund invests in bricks and mortar and keps some cash for paying claims.  If the cash runs out due to a high volume of switches or claims, the fund manager can become a forced seller of property into a weak market.


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## LDFerguson (27 May 2008)

Cobra said:


> I have two policies like this with irish life. Got no choice but to leave money . I will never again invest with irish life, now i know i would be far better off lodging my money in a deposit account at 5% but i have learned from my mistakes.hurray.


 
I don't understand your logic.  The Irish Life Property Fund returned over 12% per year from the start of 2002 to the start of 2007.  Towards the end of 2007 a lot of investors decided to switch out of this fund at around the same time so Irish Life were forced to invoke a clause to protect the investors who chose to remain.  As I posted above they had explained this possibility in pre-sales literature relating to this fund.  

What would you have preferred them to do?  Allow a run on the fund which would lead to a fire-sale of property at knock-down prices?


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## FTB1 (27 May 2008)

Ask the dog said:


> Yes, what you say is true. However, there must have been major movement out of the fund already for them to implement this new clause in the first place. I will suffer falling fund value for 6 months - why should Irish Life not suffer a little also ? I am sure they can absorb any such losses better than I can.



If the fund value goes down the management fees they collect go down as well. They would consider that to be sharing the pain. What you seem to be asking for is a risk free investment or a guaranteed product. If you really wanted that why didn't you invest in a secured performance or cash product? The 6 month delay does not apply on normal retirement or death so I think they've been fair. Restrictions such as these are the downside or investing in property and it should be weighed up when making the initial investment decision.

This thread is a little unfair in singling out Irish Life (I know thats the only property fund the OP is interested in but in the interests of a wider audience) as plenty of the other property funds available to Irish investors have similar restrictions in place.


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## roland (4 Jun 2008)

Ask the dog said:


> Yes, what you say is true. However, there must have been major movement out of the fund already for them to implement this new clause in the first place. I will suffer falling fund value for 6 months - why should Irish Life not suffer a little also ? I am sure they can absorb any such losses better than I can.


 
Is there any reason why Irish Life or any other company would 'absorb' losses on investment decisions you have taken?  Surely you have benefited from any increase in value up to now, so you should also take any reductions in value?


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## roland (4 Jun 2008)

Cobra said:


> I have two policies like this with irish life. Got no choice but to leave money . I will never again invest with irish life, now i know i would be far better off lodging my money in a deposit account at 5% but i have learned from my mistakes.hurray.


 
What return have you achieved to date?


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## JR Rizzo (16 Jul 2008)

roland said:


> What return have you achieved to date?


 
previous returns are IRRELEVANT,
each day you mark-to-market you fund/assets value
and then decide if you want to reallocate funds.

I dont like what Irish Life have done here

they made a mistake offering this fund in the first place
and charged its customers fees for investing in it.
now they are withdrawing it/changing the goal posts
to cover their error.

At the end of the day, these fund managers are highly paid professionals
that are trusted by many (financially dumb) average members of the
public to invest their hard earned cash effectively.

When things go wrong, its never their fault
- they never saw a property correction coming!!??

JR.


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## LDFerguson (16 Jul 2008)

JR Rizzo said:


> previous returns are IRRELEVANT,
> each day you mark-to-market you fund/assets value
> and then decide if you want to reallocate funds.
> 
> ...


 
So by your logic, an active fund manager should always be able to magically foresee any downturns in whatever markets they are investing in, and sell off assets just before such downturns, with the result that their funds would only go up in value endlessly.

If you meet such a fund manager, would you pass on my number?  I'd sell every asset I own and invest with him.


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## hagler (23 Sep 2008)

I was blinded by figures by my bank when I was looking to earn a bit more for my money. Unfortunately for me I didnt check it out in detail with an expert before commiting to this property fund 2 years ago.
I am now worried sick about losing the only savings I have. €10,000 approx.
Checking the values for this fund every month is a nightmare. It is falling at an alarming rate.
You cant get an honest answer from these SALESMEN in the bank. They say it will pick up again but I have my doubts. Can anybody re-assure me??
People should be really carefull when asking these institutions for advice.
I for one have learned my lesson.


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## Dave Vanian (24 Sep 2008)

It strikes me that a Property Fund is not a suitable place for investing the only savings you have.  So you may have received bad advice two years ago, in which case you may have cause for complaint against the seller.  

Do you still have correspondence from the time?  Were the risks properly explained to you?


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## Ask the dog (27 Sep 2008)

My 6 months imposed waiting period has now expired and my fund switch has been completed. In that time the property fund has fallen from 2808.60 per unit to 2260.70 (19% in six months).
I am glad to be now out even with a 19% drop, as I thing it has further to go......


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## COLAKO (9 Oct 2008)

Ask the dog said:


> Hi all,
> I have a large amount of my pension invested in Irish Life's property fund.
> In early March I requested a switch out of this fund as it has begun to fall significantly. Since Feb/March 08 to present it has lost roughly 10% of it's value. Previously there were no restrictions with regard to minimum notice required to switch into or out of this fund - It was possible to make a fund switch from the date they received written instruction to do so.
> So, imagine my dissapointment when I was told that the criteria had changed and I would now have to give 6 months notice of any fund switch out of the property fund. So, by the time I become eligible to switch out of the fund (September 08) it will probably have lost about 25% of it's value. I was told that the new criteria came into effect on 15th Feb, approximately 2 weeks after I requested my switch.
> ...


 
In a nutshell.....Irish Life did write to everybody in the property fund to advise (obviously it didt get to you) They would also have written to your broker (if you set it up via a broker). They don't really have to give you notice about this change. The terms and condistions will have something about being able to alter these things at short notice. 

The reason you have this with property is becuase its' not liquid....in order to take money out they need to surrender some of the property, this means selling it.....Like you cant buy a new house until you sell and old one (that's it in simplistic terms). If everybody is allowed to leave it causes a detremental effect on anybody who stays. Keeping you there protects the other investors.


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## COLAKO (9 Oct 2008)

JR Rizzo said:


> previous returns are IRRELEVANT,
> each day you mark-to-market you fund/assets value
> and then decide if you want to reallocate funds.
> 
> ...


 
Every other company does the same. Why didnt you switch when you anticipated a downturn in the market? The highly paid professionals sometime have very little involvement in managing the fund, at least not as much as you would think.


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## COLAKO (9 Oct 2008)

Maybe you should have invested in Irish Equities???? down around 60% in 18 months. Of course it will pick up again....who knows when but we know for sure it will.....That's the nature of investments....look at it over the long term and count the good and the bad.....One thing I must say, if it's the only €10,000 you have...I can't understand why it's in property??? and property alone......



hagler said:


> I was blinded by figures by my bank when I was looking to earn a bit more for my money. Unfortunately for me I didnt check it out in detail with an expert before commiting to this property fund 2 years ago.
> I am now worried sick about losing the only savings I have. €10,000 approx.
> Checking the values for this fund every month is a nightmare. It is falling at an alarming rate.
> You cant get an honest answer from these SALESMEN in the bank. They say it will pick up again but I have my doubts. Can anybody re-assure me??
> ...


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## COLAKO (9 Oct 2008)

They can only give good advise based on the informationm they're given....then people want to invest in particular ways contray to what advise is given....If they did it right they should have you signing a waver to specify that you want this investment despite it not being the most suitable



Dave Vanian said:


> It strikes me that a Property Fund is not a suitable place for investing the only savings you have. So you may have received bad advice two years ago, in which case you may have cause for complaint against the seller.
> 
> Do you still have correspondence from the time? Were the risks properly explained to you?


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