# setting up a new pension



## mister mac (25 Jun 2007)

Hi all,

My o/h has not got a pension set up yet.She is 27 and is looking to set one up shortly,which of the institutions would offer the best value in terms of pension funds?


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## Guest126 (25 Jun 2007)

Mister mac - an execution only provider could be the best choice for you, is she looking at an occupation scheme or would she be going down the Personal Pension/PRSA route?


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## ClubMan (25 Jun 2007)

Moved from Savings and Investments.


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## ClubMan (25 Jun 2007)

Have a look at this thread and browse/search for many other threads on pensions, charges, recommendations etc.

The cheapest PRSA?


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## Marianne (25 Jun 2007)

Isn't an execution-only service intended for people who have sufficient knowledge to choose their own financial product?  If Mister Mac is asking basic questions on Askaboutmoney.com I would suggest an execution-only service is not appropriate.


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## Guest126 (26 Jun 2007)

Marianne - I think the aim of execution only service is to provide value to customers and get away from unfair commission-related charging structures that have been the bane of pension purchasers' lives for far too long.

The firm that I work with provides advice with the execution only service so the OP could certainly use all the info available on this site together with the service of any of the execution only brokers to set-up a suitable arrangement.


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## ClubMan (26 Jun 2007)

There's more than enough information on sites like _AAM_, [broken link removed], Pensions Board etc. for people to educate themselves to the level required to choose a suitable _PRSA _or other pension and go the execution only route.


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## F. Kruger (26 Jun 2007)

CapitalCCC said:


> The firm that I work with provides advice with the execution only service .............


 

My understanding is, that you cannot provide advice with an execution only service?


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## Guest126 (26 Jun 2007)

If somebody asks a question, we will answer it.

I have never seen a law against that, who do you think ever said that we can't do that?


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## ClubMan (26 Jun 2007)

Doesn't the client have to sign an execution only form (disclaimer?) though which would indemnify the intermediary against being taken to task for bad information/advice given out?


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## Guest126 (26 Jun 2007)

Yes, they sign an execution only form, they can still ask questions and get answers though.


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## F. Kruger (26 Jun 2007)

CapitalCCC said:


> .. who do you think ever said that we can't do that?


 
It is my interpretation of the advisor 'Code of Conduct' issued by the Financial Regulator.

It probably all depends on what your definition of 'advice' is?.

PS  - The disclaimer would have to include a statement that 'no advice was received'


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## KalEl (26 Jun 2007)

CapitalCCC said:


> Yes, they sign an execution only form, they can still ask questions and get answers though.


 
Hi CapitalCCC, I want to set up a PRSA on an execution only basis but I do have some queries. Having researched it the Eagle Star Default Investment Strategy seems like a common sense approach and I'd be happier with that rather then picking individual funds myself which I feel is like pinning a tail on the donkey anyway. My questions would be things like is that a reasonable view to have? Is taking a lump sum at retirement and rolling it into an ARF the best solution if you hope to have a sizeable fund? Is an ARF the best way to go from an inheritance point of view for your kids? Can I retire at any age?
Do your company answer these types of queries when providing an execution only service?


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## Guest126 (26 Jun 2007)

Hi KalEl

Yes, thanks for your post, these are exactly the types of questions that we would answer.

F Kruger - as you will note - answering these questions is not "advice" it is merely filtering information for the client - information that is widely available (but gets buried in the detail) in the various forms, flyers, brochures produced by the larger insurance companies.

KalEl, please PM me if you would like to discuss further.


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## F. Kruger (26 Jun 2007)

As I said above, these are my interpretations of the guidelines issued by the Regulator. The relevant section of the 'Code of Practice' is posted here http://www.askaboutmoney.com/showthread.php?t=42573&highlight=Execution+Service

I would have thought that it was the Regulators intention to polarise the two ways of purchasing a product and not have a 'pick and mix' arrangement.


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## Guest126 (26 Jun 2007)

And what about the case where you have a problem with your car - and take it to a mechanic to fix it...if the mechanic also gives basic advice for example "I think you are being too heavy on the clutch" or "your tyres may need changing", is that advice not useful simply because it was not paid for?
Come on man, this is the real world!


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## KalEl (26 Jun 2007)

CapitalCCC said:


> And what about the case where you have a problem with your car - and take it to a mechanic to fix it...if the mechanic also gives basic advice for example "I think you are being too heavy on the clutch" or "your tyres may need changing", is that advice not useful simply because it was not paid for?
> Come on man, this is the real world!


 
Refreshing to hear CapitalCCC...for too long pension providers have been trying to stitch people up with paying high percentages for straightforward "advice". Well done.
F.Kruger I think your comments are anti-consumer and go against the grain of a site like this


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## ClubMan (26 Jun 2007)

But - as I said above - it is significant that the client signs a disclaimer in the execution only case which means (as far as I know) that they have no comeback if they feel that any advice/information given was wrong/inappropriate. This is quite relevant in this context. I hope that I am not going to be accused of being anti-consumer too. For the record I deal with an execution only broker who dispenses such "unofficial" information/advice and am quite happy with this arrangement. But people need to be clear on where their rights and the responsibilities of the intermediary lie. For some people an execution only service with or without "unofficial" information/advice may be appropriate. For others an advisory service usually involving higher charges/fees will fit the bill. Horses for courses.


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## KalEl (26 Jun 2007)

ClubMan said:


> But - as I said above - it is significant that the client signs a disclaimer in the execution only case which means (as far as I know) that they have no comeback if they feel that any advice/information given was wrong/inappropriate. This is quite relevant in this context. I hope that I am not going to be accused of being anti-consumer too. For the record I deal with an execution only broker who dispenses such "unofficial" information/advice and am quite happy with this arrangement. But people need to be clear on where their rights and the responsibilities of the intermediary lie.


 
I agree with you completely...advice shall we say "off the record" is all I would look for and be grateful to accept. What I'm unhappy with is other posters in other threads who've attacked people for seeking answers to simple queries like mine for example as if they were looking for a free lunch. It was if there were only two options...absolute execution only or thousands in fees for minimal advice. One can only conclude there are vested interests at play.
I find it refreshing to hear that brokers are applying common sense, commend them for it and hope they get the increased business they deserve.


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## Guest126 (26 Jun 2007)

Thank you KalEl, I do not wish to have a go at F K or anyone else, but I really can't understand why people would try to interpret legislation that is meant to protect consumers as a way of restricting the additional opinion that can be given to them.


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## ClubMan (26 Jun 2007)

On the other hand I do know of execution only brokers who eventually have to draw a line in the sand and sometimes say "*absolutely *no advice" due to people wasting their time by ostensibly opting for execution only but then actually looking for quite a bit advice. 

The regulatory issues are another issue but one would hope that some level of pragmatism was applied and it looks like some intermediaries do just this.


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## LDFerguson (26 Jun 2007)

Before providing a product or service to a​​consumer, a regulated entity must gather and record sufficient information from the consumer to enable it to provide a recommendation or a product or service appropriate to
that consumer. The level of information gathered should be appropriate to the nature and complexity of the product or service being sought by the consumer, but must be to a level that allows the regulated entity to
provide a professional service.

This requirement does not apply where the consumer has specified both the product and the product provider and has not received any advice.

If asking and answering questions does not constitute advice, what does?

Liam D. Ferguson
www.ferga.com​


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## Guest126 (26 Jun 2007)

In my way of looking at it, giving advice involves giving an informed opinion.

Providing information is merely providing factual answers to factual questions, for example what is the max pension contribution as a % of pensionable earnings for someone between ages 30 and 39*...answering a question like that is not providing any form of advice it is merely providing information that should be provided free.

*The answer is 20% of pensionable earnings - that is not "advice"!


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## LDFerguson (26 Jun 2007)

Okay - if you have a workable system to allow you to answers questions that are involved with the provision of information but refuse to answer those that involve provision of advice and still charge a discounted "execution-only" fee I applaud you.


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## Guest126 (26 Jun 2007)

Thanks for the applause - I am certainly willing to give it a go.


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## F. Kruger (26 Jun 2007)

That's a great service.

You should really post full details of the company so that more people can contact you.


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## Guest126 (26 Jun 2007)

Thank you FK - you changed your tune fairly quickly from a dissenter to a supporter 

If people would like to contact, sure they can use the PM function, a number of users have done so previously.


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## boaber (26 Jun 2007)

CapitalCCC said:


> In my way of looking at it, giving advice involves giving an informed opinion.
> 
> Providing information is merely providing factual answers to factual questions, for example what is the max pension contribution as a % of pensionable earnings for someone between ages 30 and 39*...answering a question like that is not providing any form of advice it is merely providing information that should be provided free.
> 
> *The answer is 20% of pensionable earnings - that is not "advice"!



Using this example, if a person asks what COULD I contribute as a % of pensionable earnings, then one would be giving information and not advice.

If the person were to ask, what SHOULD I contribute, then one would be giving advice.


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## LDFerguson (26 Jun 2007)

Apologies to the original poster, as this thread seems to be veering off into a discussion of execution-only vs advisory services.  

While we're all happy with the distinction between advice and information, I'd be concerned that the Financial Regulator may not share the view.  

KalEl gave the following as examples of his queries: - 


> Is taking a lump sum at retirement and rolling it into an ARF the best solution if you hope to have a sizeable fund? Is an ARF the best way to go from an inheritance point of view for your kids?


 
The Consumer Protection Code says: - 


> ...the consumer has specified both the product and the product provider and has not received any advice


 
My interpretation would be that KalEl is not clear on what product s/he requires and therefore needs advice, not execution-only.  

Not trying to be argumentative; just interested to hear views.


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## KalEl (26 Jun 2007)

Liam, you're always a very helpful contributor on AAM but I think you're being unfair here. It's in your interest for this Code to be strictly enforced. What CapitalCCC was suggesting was advice off the record and without recourse which I would not have a problem with; in fact it would be a plus. I for one would not run off to the Financial Regulator or whoever and report someone for helping me. There should be a middle ground between "execution only no advice" and massive charges and common sense seems to have created one.


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## Brendan Burgess (26 Jun 2007)

It's a very difficult topic and there is no straightforward answer. 

If someone wants to provide advice and information and charge execution-only prices, that is good for the consumer. My small experience of execution-only brokers is that they do get asked questions and they do tend to answer them. 

Financial advice should not be given without a fact find. That is common sense and it is also the Financial Regulator's code. I am wary of questions on Askaboutmoney which say "Where is the best place to invest €30k?" Some background is needed to answer it properly.  If I go to an exectution-only broker and ask this question, they should not answer it without doing an appropriate fact find. If I go to an execution-only stockbroker and say I want to buy an Eagle Star investment fund, but ask their advice on which one, the fact find is less relevant, but still a bit relevant. If I go for an Eagle Start investment fund and they encourage me to switch to a Caledonian With Profits fund, then they should do a fact find and a detailed "reasons why" letter. 

Brendan


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## Guest126 (26 Jun 2007)

LDFerguson said:


> My interpretation would be that KalEl is not clear on what product s/he requires and therefore needs advice, not execution-only.
> 
> Not trying to be argumentative; just interested to hear views.


 
I would point out that KalEl has intimated that he/she would be interested in going down the PRSA route - the decision to go down the ARF or annuity route is one that KalEl will not face until retirement date - possibly 15 or 20 years away dare I say KalEl?

So there is no advice needed in relation to an ARF at this point - merely information (along the lines of this post) and more information to enable Kal to make an informed decision - my view is that it is the policy holder's money...not mine...so my job is to provide them will all the necessary information to make an informed decision.


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## KalEl (26 Jun 2007)

CapitalCCC said:


> I would point out that KalEl has intimated that he/she would be interested in going down the PRSA route - the decision to go down the ARF or annuity route is one that KalEl will not face until retirement date - possibly 15 or 20 years away dare I say KalEl?
> 
> So there is no advice needed in relation to an ARF at this point - merely information (along the lines of this post) and more information to enable Kal to make an informed decision - my view is that it is the policy holder's money...not mine...so my job is to provide them will all the necessary information to make an informed decision.


 
I'm 27 so about 28 years until retirement. Certainly don't want to purchase an annuity which will die and not pass on to my kids before I die. Want to draw down whatever percentage of the fund I can and then bung it into an ARF I think. I know I want to go with Eagle Star and the DIS looks good to me...seems like common sense. Just need my hand held so to speak I guess.


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## LDFerguson (26 Jun 2007)

> It's in your interest for this Code to be strictly enforced.


 
On the contrary - if I was being selfish I'd say that my own interests would be best served if there was no Code or regulation whatsoever.  When I started in this business in the late eighties, there was very little regulation and the process of selling any sort of investment or pension policy was pretty much (a) talk to the client about it and (b) get them to sign the form.  If such a regime still existed today I dare say I would be earning more money as it was far less time consuming and therefore I could sell more products in a working day.

Besides, I offer execution-only services and also advisory services, so I'm not sure why you'd think it's in my best interests for this Code to be strictly enforced, above any other broker's.  

But unethical salespeople created a need for regulation and so we work with it.  The regulations do improve the perception of professionalism in this business so looking at the bigger picture they're to be welcomed.  They also do protect consumers, especially the vulnerable - those who wouldn't know how to switch on a computer, much less study Askaboutmoney.com.  

Anyway, I suppose my objection to the widespread blurring of lines between advisory service and execution-only can be summed up in two points: - 

(1) It makes it difficult for an "ordinary" consumer (not the clued-in punters who frequent AAM) to understand what sort of advisor or service is best suited to their needs.  

(2) It leaves the door open for unethical brokers to sell inappropriate products to unwitting consumers, cover themselves with an execution-only declaration and all of a sudden a widow or orphan loses a chunk of her life savings to a product she didn't understand, the broker can't be pursued because she signed an execution-only declaration and the myth that this industry is populated solely by charlatans and rip-off artists gets reinforced...again.  

I've no doubt that CapitalCCC, like all the brokers who post on this board that I've seen, will offer sound, honest and good advice to clients regardless of whether or not they're required to do so by legislation.  If all brokers acted with integrity, there would be no need for regulations at all.

I've no problem with a certain amount of pragmatism being shown in the interpretation of the Code, when it benefits a consumer.  I just think there are risks involved if the Consumer Protection Code is not seen to be enforced, as it will therefore follow that unethical brokers won't be afraid of it.


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## LDFerguson (26 Jun 2007)

Blank post - technical trouble - do not adjust your set.


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## Guest126 (27 Jun 2007)

I feel that if a prospective pension client approaches me with a good understanding of what they would like - and they just want some further information that is widely available in the pensions arena, but not so easily available to those not working in this sphere - then that client is indeed an execution only client and they should be given the various little pieces of info (not advice) that they require.

I gather from Kal El's posts that he is neither a widow nor an orphan.


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## LDFerguson (27 Jun 2007)

But do you see my point - in this instance you're making a perfectly valid (and I would say correct) judgement call that KalEl knows most of what he's doing and therefore just needs a bit more information.  By extension, if someone came along requesting Execution Only and you felt they didn't have a clue what they were about, I presume you would steer them towards an advisory process.  Like I said above, I don't doubt for a moment that you personally will use your judgement to give appropriate advice to anyone who comes to you.  

But should the Consumer Protection Code offer the same leeway to make judgement calls to unethical brokers out there whose only interest is maximising their own commission regardless of the effect on their customers?  



> I gather from Kal El's posts that he is neither a widow nor an orphan.


 
True, but that information was voluntarily revealed by KalEl in his second and subsequent posts on this thread.  In the real world, such information as he revealed would only be disclosed in a Fact Find.


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## Guest126 (27 Jun 2007)

In the real world, you would find out pretty quickly if someone was an orphan or a widow when you met them face to face.

I take your point, but I feel it was quite wrongly used as a criticism (earlier in this thread) of my pointing out to Kal El that an execution only deal can still involve an element of assistance and guidance.


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## LDFerguson (27 Jun 2007)

Well, I still hold that some of the questions posed by KalEl here http://www.askaboutmoney.com/showpost.php?p=438898&postcount=13 cross the line between requiring information and requiring advice.  And I therefore feel that an execution-only service would be inappropriate here.  

But that's my interpretation; you have yours.  Without asking the Financial Regulator to adjudicate, neither one of us knows for sure which interpretation is closer to the Code.  I'm happy with my interpretation; I'm sure you are with yours.


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## RS2K (30 Jun 2007)

Cut price brokers are not charities. They charge less, but still get paid some commission, plus overide for volume.


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## Guest126 (30 Jun 2007)

We would get absolutely no commission on an individual's pension if it were set up as execution only.


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## ClubMan (30 Jun 2007)

Surely this does not mean that you get absolutely no remuneration at all? Maybe some people say "commission" when the actually mean something else?


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## LDFerguson (30 Jun 2007)

> We would get absolutely no commission on an individual's pension if it were set up as execution only.


 
Do you not get over-ride commission?



> Surely this does not mean that you get absolutely no remuneration at all? Maybe some people say "commission" when the actually mean something else?


 
I presume CCCC means that they charge a fee.


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## Guest126 (30 Jun 2007)

LDFerguson said:


> Do you not get over-ride commission?
> 
> 
> 
> I presume CCCC means that they charge a fee.


 
(1)No

(2)Evidently


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## ClubMan (30 Jun 2007)

CapitalCCC said:


> (2)Evidently


I presume you either mean you don't know for sure or "obviously"?


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## Guest126 (1 Jul 2007)

Obviously might be easier to interpret for you Club!


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