# AVC's not performing / selecting a fund risk related with IRISH LIFE



## HynesMA (30 Oct 2020)

I am putting 900 euro per month split equally into 3 different funds :
A Empower cautious fund.
B Multi Asset Fund MAPS 3
C Flexible Fund

They are all in Risk 3 category and all appear to be loosing value and falling !!!  …. I am 60 with 5 years to go ……. my Question is should I leave them as they are or move them to lower Risk funds ???????? ……. also I am not happy with Irish Life charges relative to competitors !!! ?!!


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## Steven Barrett (30 Oct 2020)

You are invested in funds that aren't generating any returns. There is little to no return in bonds at present. Bonds also fell in value earlier this year. Add in charges and you are in negative returns territory. Reducing risk is going to cash and a definite negative return as there is zero return. It is difficult for the cautious investor at this time as there is nowhere to make a modest return without having to take on more equity exposure than they want. That is the decision you have to make, risk versus return. 

On the charges, talk to your employer about the charges as they are the ones that decide which company to use. 


Steven
www.bluewaterfp.ie


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## HynesMA (2 Nov 2020)

Thanks for your help Steven   …….. 

I am thinking of stopping any more AVC contributions to Irish Life as they are too expensive  (funds underperforming) and move to some other company which offers better overall value,  ……… any idea who would be good to move and start off AVC's with at 60years and 5 to go ???  ……..


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## ashambles (2 Nov 2020)

SBarrett said:


> There is little to no return in bonds at present. Bonds also fell in value earlier this year. A
> 
> 
> Steven
> www.bluewaterfp.ie


I'm not quite sure how recent you mean my at present, but there is a return from bonds, typical euro gov bond funds are up around 5-10% this year. They look to me to be the best performing widely held funds of this year?



I'd forget about moving to another company, it's as likely to cost extra (especially over a company plan). If you think your company scheme is expensive you'll probably find it's a lot cheaper than an individual pension.

I think you need to look at changing funds within Irish Life first. 

For myself with negative interest rates I'd avoid cautious funds even if a few years out from retirement, they might be 30% or more in cash - and pension companies could be charging you minus 2% for cash. so those funds will be giving disappointing returns for the foreseeable future.

Unfortunately selecting funds, particularly from the huge range Irish life have, is not easy. Irish life seem to believe more is better, but a lot of their funds now are pointless duplicates of other funds they sell.


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## HynesMA (3 Nov 2020)

Yes as you say ……
Unfortunately selecting funds, particularly from the huge range Irish life have, is not easy …… 
These are my 3 existing AVC funds which are all in Risk 3 areas : 

 A Empower cautious fund.
 B Multi Asset Fund MAPS 3
 C Flexible Fund

Any help or suggestions changing to more promising funds at this time greatly appreciated as I am unexperienced in this area ! ???  ….

Regards,
Mike


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## Dave K (11 Nov 2020)

HynesMA



ashambles said:


> I'd forget about moving to another company, it's as likely to cost extra (especially over a company plan). If you think your company scheme is expensive you'll probably find it's a lot cheaper than an individual pension.



While this is correct, I would recommend look at your options. While yes the AMC may be higher else where, this could be the difference of having someone providing you with more benefical advice. Are you getting the returns you need where you are? You have answered that already in saying your are possibly getting a negative return.
You do not have to make the AVC direct to your company and it may be in your best interest to do that.

While the charge may be higher else where, if you are getting solid advice you could and should expect a much better return even taking your risk rating into account and the higher AMC will be worth it.

My advice would be to speak with a Financial Advisor. It should not cost you anything to that and could be quite significant especially coming towards your retirement.

David


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## Dave Vanian (12 Nov 2020)

Dave K said:


> While the charge may be higher else where, if you are getting solid advice you could and should expect a much better return even taking your risk rating into account and the higher AMC will be worth it.



This has come up here before.  Are you saying that a financial adviser can pick a fund for a client that will outperform others despite higher charges?


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## Dave K (26 Nov 2020)

Hi Dave, 
Well in theory you can set up a fund and get say an AMC of 0.75% and agree a fund with an advisor and he will be in contact at least once a year with an update. If the fund has grown, great you are both happy. But depending on how it is managed will depend on the amount of contact the advisor will have with you. 
On the other hand you can set up a fund with say a AMC of 1% to 1.5% and with best advice can get a far bigger growth.
Take this year for example, there was a fantastic opportunity for growth but it would only have happened if there was contact between advisor and client and with switching between funds.


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## Allpartied (26 Nov 2020)

This type of investor is getting screwed by the pension companies. 
Really in the final 4 or 5 years you would be better off putting the money into National Savings Bonds. 
You get a guaranteed small return, no charges, no risk. But you can't get the tax relief, so you are forced to pay these companies a big slice and then hope they don't lose you even more money by picking the wrong investment vehicle.


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## Dave K (26 Nov 2020)

Allpartied said:


> This type of investor is getting screwed by the pension companies.
> Really in the final 4 or 5 years you would be better off putting the money into National Savings Bonds.
> You get a guaranteed small return, no charges, no risk. But you can't get the tax relief, so you are forced to pay these companies a big slice and then hope they don't lose you even more money by picking the wrong investment vehicle.



You state they would be better of putting money into Savings Bonds but then follow that up with 'But you cant get tax relief'

Take someone paying 40% tax. They look to put money into Savings of €100. They earn €100 less tax 40% so have €60 to put into Savings. So for them to put in €100 euro into savings they actually need to earn €166 euro before tax to have a net of €100 euro. 
Take someone who puts it into a Pension instead, they get the tax relief and so can actually put in the full €166 into their pension and on their pay slip they are only down net €100 euro. 
So going by this someone puts 100 into savings compared to 166 into pension (same net difference on their pay as paying 40% tax) the pension in theory can lose nearly 40% and still be on level par as savings. So to say people are better off putting money into savings I do not agree.

I think we have gone off topic a bit so apologies.


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## Dave Vanian (26 Nov 2020)

Dave K said:


> Take this year for example, there was a fantastic opportunity for growth but it would only have happened if there was contact between advisor and client and with switching between funds.



So, as a broker, you claim that you can spot fantastic opportunities for growth IN ADVANCE and advise your clients to switch funds to avail of them, while charging a higher fee/commission for your service.  Sorry but I don't believe that's possible.  How many years of a track record of correctly advising your clients when to switch funds have you got?


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## Allpartied (26 Nov 2020)

Dave K said:


> You state they would be better of putting money into Savings Bonds but then follow that up with 'But you cant get tax relief'
> 
> Take someone paying 40% tax. They look to put money into Savings of €100. They earn €100 less tax 40% so have €60 to put into Savings. So for them to put in €100 euro into savings they actually need to earn €166 euro before tax to have a net of €100 euro.
> Take someone who puts it into a Pension instead, they get the tax relief and so can actually put in the full €166 into their pension and on their pay slip they are only down net €100 euro.
> ...



Sorry, I may have been a bit unclear. 
Obviously they are better off putting the money into a pension fund, even if they get charged 4 or 5% and then lose another 2 or 3 % in the market, because they get the 40% tax rebate. 
My point is that there should be a state run vehicle for pension investments, which mimics the National Savings Bond rates, guarantees a return and allows the investor to avail of the tax rebate. 
I have had this discussion with others on this issue before and I am still unable to understand why this type of option is not available. 
Particularly, for those who want to turbo charge a final pension contribution in the last 4 or 5 years of their working lives.


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## Conan (26 Nov 2020)

Allpartied said:


> Sorry, I may have been a bit unclear.
> Obviously they are better off putting the money into a pension fund, even if they get charged 4 or 5% and then lose another 2 or 3 % in the market, because they get the 40% tax rebate.
> My point is that there should be a state run vehicle for pension investments, which mimics the National Savings Bond rates, guarantees a return and allows the investor to avail of the tax rebate.
> I have had this discussion with others on this issue before and I am still unable to understand why this type of option is not available.
> Particularly, for those who want to turbo charge a final pension contribution in the last 4 or 5 years of their working lives.


But the return on National Savings Bond type vehicles is minuscule. This type of investment won’t “turbo charge” a contribution.


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## Allpartied (26 Nov 2020)

Conan said:


> But the return on National Savings Bond type vehicles is minuscule. This type of investment won’t “turbo charge” a contribution.


If you only have a 5 year investment plan, then you might prefer the guaranteed 1 or 2%.  Coupled with the 40% tax rebate, it makes for a very healthy return.
A Pension fund will charge you a percentage, and then invest it in a vehicle which may well lose you money.
It's a choice people should be able to make, but they can't , they have to put their savings into a private pension fund, if they want to avail of the 40% tax rebate.
It's possible better returns will be available from these private companies and the money they charge will be money well spent.  But why no choice?

I have a quote from IPF, which has the following  prediction

Monthly Contribution 1859pm from Jan 2021 to Oct 2025 

Total Contributions ( 58 x 1859)  =  107822

Expected Fund in October 2025  =   102858

This is with an optimistic return of 3% pa. 

So I will be down 5k, even if they get 3% growth per year. 

Is that a good deal?


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## Dave Vanian (26 Nov 2020)

Allpartied said:


> I have a quote from IPF, which has the following  prediction
> 
> Monthly Contribution 1859pm from Jan 2021 to Oct 2025
> 
> ...



No it's not a good deal.  You can get better than that.  Shop around.  It's possible to set up a pension plan with charges of around 1% per year when they're all added up.  So if the projection is that the fund increases at 3%, you'd get around 2% growth. 

The charges on this plan are evidently much higher than that as they're swallowing all your growth and then some.  Avoid.  Remember that the broker decides the level of charges applying to a plan.  So if one broker is charging more than you'e willing to pay for the service provided, find a different one.


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## Dave Vanian (26 Nov 2020)

State Savings at the moment are returning less than 1%.  If you want to access them you'd need a self-administered pension plan.  

Alternatively you can choose a low-risk fund choice but in the current climate the "return" on that is likely to be less than zero.


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## Steven Barrett (26 Nov 2020)

Dave Vanian said:


> So, as a broker, you claim that you can spot fantastic opportunities for growth IN ADVANCE and advise your clients to switch funds to avail of them, while charging a higher fee/commission for your service.  Sorry but I don't believe that's possible.  How many years of a track record of correctly advising your clients when to switch funds have you got?



Just to give ADVANCE notice to anyone who is thinking of contacting me, I CANNOT spot fantastic opportunities in advance. And I won't tell you to switch funds very often either. I reckon MSCI have better ability, knowledge and expertise to design an index that represents the world stock market than I do, so I take advantage of their expertise. 


Steven
www.bluewaterfp.ie


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## GSheehy (26 Nov 2020)

Allpartied said:


> I have a quote from IPF, which has the following  prediction
> 
> Monthly Contribution 1859pm from Jan 2021 to Oct 2025
> 
> ...



Woeful stuff. 

Find someone else.


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## Allpartied (26 Nov 2020)

SBarrett said:


> Just to give ADVANCE notice to anyone who is thinking of contacting me, I CANNOT spot fantastic opportunities in advance. And I won't tell you to switch funds very often either. I reckon MSCI have better ability, knowledge and expertise to design an index that represents the world stock market than I do, so I take advantage of their expertise.
> 
> 
> Steven
> www.bluewaterfp.ie





GSheehy said:


> Woeful stuff.
> 
> Find someone else.



IPF are one of the brokers who can deal directly with public servants and the contributions can be taken directly from salary, incorporating the tax relief.  So that is an advantage. Cornmarket the other provider are even worse. 

So how would I go about setting up the same pension plan independently.  Would it be worth paying an indpendent advisor to help set up a less costly plan?


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## GSheehy (26 Nov 2020)

@Allpartied 

Salary deduction isn't an advantage if the cost of that route is prohibitive. 

You can easily claim the relief yourself , see here 

If you know what product provider you want to invest with and you're happy with an AVC-PRSA then you can scroll through the  page, contact one or two of them and ask about the costs. The only part of the transaction that you might need help with is fund selection, but if you're risk averse your options will be limited to two or three funds anyway.  

Folk on here will help you, if you get stuck.

Just ask.


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## Dave K (26 Nov 2020)

Dave Vanian said:


> So, as a broker, you claim that you can spot fantastic opportunities for growth IN ADVANCE and advise your clients to switch funds to avail of them, while charging a higher fee/commission for your service.  Sorry but I don't believe that's possible.  How many years of a track record of correctly advising your clients when to switch funds have you got?



You are 100% right in saying that brokers cannot see IN ADVANCE. None of us unfortunately have a crystal ball. 
However what is important to note is that the falls in the market, take 2020 for example did not happen over night. It took nearly 4 weeks to bottom out starting from just before the country received its first positive case of Covid 19 in February until after St Patrick's Day. 
Also I think it is fair to say that that even before Ireland had its first confirmed case of Covid 19 that there was a lot of worry and uncertainty.

What I was trying to point out was that just because your AMC is higher, that does not necessarily mean you will not have as much return.


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## Dave Vanian (26 Nov 2020)

Dave K said:


> You are 100% right in saying that brokers cannot see IN ADVANCE. None of us unfortunately have a crystal ball.
> However what is important to note is that the falls in the market, take 2020 for example did not happen over night. It took nearly 4 weeks to bottom out starting from just before the country received its first positive case of Covid 19 in February until after St Patrick's Day.
> Also I think it is fair to say that that even before Ireland had its first confirmed case of Covid 19 that there was a lot of worry and uncertainty.
> 
> What I was trying to point out was that just because your AMC is higher, that does not necessarily mean you will not have as much return.



All of the things you mention above that happened in 2020 are only known with hindsight.  

Market timing is impossible unless you have a crystal ball.  

So if you don't have a crystal ball, then why would anyone pay you a higher AMC?


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## Dave K (26 Nov 2020)

Dave Vanian said:


> All of the things you mention above that happened in 2020 are only known with hindsight.
> 
> Market timing is impossible unless you have a crystal ball.
> 
> So if you don't have a crystal ball, then why would anyone pay you a higher AMC?



Why would someone pay a higher AMC. 
Simple answer is for the service they provide and experience that goes with that.


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## Dave Vanian (26 Nov 2020)

Dave K said:


> Why would someone pay a higher AMC.
> Simple answer is for the service they provide and experience that goes with that.



I have no problem paying someone extra for extra service.  I have no problem paying someone extra for their experience if they can demonstrate how that experience will benefit me.  

This is the bit I have a problem with... being advised to switch funds in order to avail of fantastic opportunities.  



Dave K said:


> Take this year for example, there was a fantastic opportunity for growth but it would only have happened if there was contact between advisor and client and with switching between funds.


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## Conan (26 Nov 2020)

Brokers can certainly provide a useful service in advising on:
- correct type of pension product
- options from different providers
-  determining the appropriate, tax effective contribution level
- helping the client to understand the investment risks and potential growth
But I would walk away from an advisor who claims they can tell me in advance as to what markets/funds/investment will perform best. If they had such perfect foresight, they would not be telling the secret to others (even for a fee). Professional advice can be very valuable, but you need to know what advice you are paying for.


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## Dave K (26 Nov 2020)

But I would walk away from an advisor who claims they can tell me in advance as to what markets/funds/investment will perform best. 
[/QUOTE]
Conan 100%... I would not trust a broker who will try tell me what fund will perform best. That is just not going to happen. 

But unfortunately the way the industry is there can be a big gap between different advisors and the advice they give.


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## Dave K (26 Nov 2020)

This is the bit I have a problem with... being advised to switch funds in order to avail of fantastic opportunities.
[/QUOTE]
To take how you have quoted it, I would have a problem advising people to switch funds for fantastic opportunity. 
That is different to me saying that this year did provide an opportunity for people to achieve further growth. And some of my clients have achieved that by switching funds. That is a fact.


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## Conan (26 Nov 2020)

Dave K said:


> This is the bit I have a problem with... being advised to switch funds in order to avail of fantastic opportunities.


To take how you have quoted it, I would have a problem advising people to switch funds for fantastic opportunity.
That is different to me saying that this year did provide an opportunity for people to achieve further growth. And some of my clients have achieved that by switching funds. That is a fact.
[/QUOTE]
But that’s hindsight. Every year provides opportunities for “further growth”, whether markets are on the up or on the down. That’s a given. What’s not, is knowing in advance what those opportunities will be be.


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## Dave K (26 Nov 2020)

[/QUOTE]
But that’s hindsight. Every year provides opportunities for “further growth”, whether markets are on the up or on the down. That’s a given. What’s not, is knowing in advance what those opportunities will be be.
[/QUOTE]
Absolutely,
and to point out I have not once said otherwise. But feel like some of the responses are challenging that.

We have gone way off point here, so apologies to the thread. maybe some cleaning up will be needed.


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## Dave Vanian (26 Nov 2020)

Dave K said:


> Absolutely,
> and to point out I have not once said otherwise. But feel like some of the responses are challenging that.



I am certainly challenging the notion that a broker can justify charging a higher AMC with the promise of better fund performance, by using fund switches.  



Dave K said:


> While the charge may be higher else where, if you are getting solid advice you could and should expect a much better return even taking your risk rating into account and the higher AMC will be worth it.





Dave K said:


> On the other hand you can set up a fund with say a AMC of 1% to 1.5% and with best advice can get a far bigger growth.
> Take this year for example, there was a fantastic opportunity for growth but it would only have happened if there was contact between advisor and client and with switching between funds.





Dave K said:


> To take how you have quoted it, I would have a problem advising people to switch funds for fantastic opportunity.
> That is different to me saying that this year did provide an opportunity for people to achieve further growth. And some of my clients have achieved that by switching funds. That is a fact.



It certainly seems to me from what you've said above that you advise your clients to switch funds to avail of opportunities.  

In the first quote above you say that a higher AMC will be worth it if the client gets a much better return.  But the client is locked into the higher AMC from the start, for the life of the product.  How do you know that you're going to get them a much better return?


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## Dave K (26 Nov 2020)

*I am certainly challenging the notion that a broker can justify charging a higher AMC with the promise of better fund performance, by using fund switches. *

Firstly on this Dave Vanian I do not promise my clients a better fund performance than anything or anyone else. But certainly feel free to jump to any conclusion you wish. At no point have I made that claim that I can provide better fund performance.

*It certainly seems to me from what you've said above that you advise your clients to switch funds to avail of opportunities. *
To untwist your words again, I did not say switch funds to avail of opportunities. I said that there were opportunities for people to achieve growth, (as Conan agrees this is a given as every year there is opportunities to achieve growth) and that some of my clients have achieved that with changing funds. There is a difference.
I provide advice to my clients on an ongoing basis. At times yes I may recommend a client to switch a fund, maybe de-risk for a period of time etc. I provide advice to my clients and some may take it and others don't. My clients have the choice.  


*In the first quote above you say that a higher AMC will be worth it if the client gets a much better return.  But the client is locked into the higher AMC from the start, for the life of the product.  How do you know that you're going to get them a much better return?*

Dave finally, as you agreed i said  'a higher AMC will be worth it if the client gets a much better return'...... if you would like for me to expand, i can say 'A higher AMC will not be worth it if the client gets a lower return'..... They are just statements, both equally valid. 
At no point I have said that I am going to get them a much better return. I have at no point made that claim. 

Sometimes financial advisors focus mainly on the AMC and I am just pointing out that just because the AMC may be lower it doesn't always mean it will be better overall, and also just because the AMC is higher doesn't mean it will be worse off.

Also at no point I have advised what charges I apply to any of my clients.

But i agree with you, if someone was making the comments you taught i was, I too would challenge them.


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## Sarenco (26 Nov 2020)

Ok, we’ve established that you are not claiming that you can predict what will be a winning fund.  Right?

When you say you may recommend that a client “de-risk for a period of time” are you claiming an ability to time the market?

if not, what exactly is the basis for these recommendations?


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## Dave Vanian (26 Nov 2020)

Dave K said:


> While the charge may be higher else where, if you are getting solid advice you could and should expect a much better return even taking your risk rating into account and the higher AMC will be worth it.



So how exactly does a broker provide the better return a client can expect, even taking the client's risk rating into account, so that the higher AMC will be worth it?  Bear in mind that the broker has to recommend the higher AMC product at the start of the transaction and the higher AMC applies for the full duration of the contract.  So the broker needs to know from the start that the client will get a better return to justify the higher AMC.  

You say that a client "could and should expect a much better return".  How does a broker go about providing this much better return for the client?


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## Dave K (26 Nov 2020)

Sarenco said:


> Ok, we’ve established that you are not claiming that you can predict what will be a winning fund.  Right?
> 
> When you say you may recommend that a client “de-risk for a period of time” are you claiming an ability to time the market?
> 
> if not, what exactly is the basis for these recommendations?


No I am not claiming the ability to time the market.
What is the basis for these recommedations? It is like any recommendation you may give. You provide advice for a certain product, a certain fund a certain provider or what ever it is. You provide this advice based on your knowledge, your experience, resources available to you to name just a few.
When you or if you provide advice to a client to select a fund or number of funds, a product, a provider etc what is the basis for your recommendations?


Dave, That is up to each individual broker to find out how they can do that. 
I am sure you have adopted your own techniques or your own way to perform your role to the best of your ability. How you do that is up to you. What you offer your clients is up to you.
My comments (apart from the one I mentioned that I do advise my clients on an ongoing basis and may recommend a fund switch) have all been made as general comments and I was making the point that just because the AMC is higher does not always make it worse off.

From your comments, I take it you do not agree with that statement. It is something you have a habit of questioning when it comes up on pages. Some brokers get paid a commission, some brokers get paid a fee. Some brokers choose lower AMC than others, some have a higher AM.. Which way is the correct way of doing things would you say.
If a broker wished they could take 0% commission, and get any commission allocated to the clients funds, they could take lowest AMC and the client has the best outcome. Not the best outcome for the broker as he wont be paid for his work.
Again I am not saying this is the way I or anyone else works.


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## Dave Vanian (26 Nov 2020)

Okay so you said this to the original poster earlier in this thread...



Dave K said:


> While the charge may be higher else where, if you are getting solid advice you could and should expect a much better return even taking your risk rating into account and the higher AMC will be worth it.



I disagree with this statement.  I asked you to back it up by explaining how a broker can do this.  

Your reply is...



Dave K said:


> That is up to each individual broker to find out how they can do that.



So you're telling the original poster that they should expect a much better return but when asked to explain, you're saying that each broker must find out how to do this for themselves?  Okay, where does a broker go to find out how to get a better return for their client, taking their risk rating into account, to justify recommending a higher AMC product.


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## Dave K (26 Nov 2020)

Dave Vanian said:


> Okay so you said this to the original poster earlier in this thread...
> 
> 
> 
> ...



Again Dave, you have a habit of selecting certain words and omitting others.
If you are getting solid advice(or good advice) I believe that you should get a better return..... A better return to what I am sure you will ask next. A better return than if you get poor advice. (and I am not saying anyone in particular is giving poor advice before that is thrown at me)... 
That was the point of the comment, some people will say go for the lowest AMC but that is not always the best result.


My response Dave was to your question.... How does a broker go about providing this much better return for the client? 
And I responded saying well that is up to the individual broker to find out. 
If your broker wants to further their education, do courses, learn on the job, deal with their broker support, what ever way they want to gain more knowledge is completely up to them. It is not up to me to tell other brokers what they should do. And so i will kindly decline answering that one.

You ask how to justify recommending a higher AMC product... I will ask a question how can a broker justify taking a commission from a client. Why not allocate the commission that is paid to a broker to the clients fund instead so they benefit from it and charge the lowest AMC available. That way the client will get the most out of transaction and the broker can get paid nothing.


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## SPC100 (27 Nov 2020)

Dave K said:


> When you or if you provide advice to a client to select a fund or number of funds, a product, a provider etc what is the basis for your recommendations?



Sound Academic / scientific research applied to their circumstances is what the basis should be.

Generally, The equity funds should be a passive index tracking solution, at the lowest total cost, with tax effects taken into consideration.

Maybe a bit higher cost is acceptable if there are some concerns or risks for a given provide/solutionr, or for convenience.


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## SPC100 (27 Nov 2020)

Dave K said:


> If you are getting solid advice(or good advice) I believe that you should get a better return..... A better return to what I am sure you will ask next. A better return than if you get poor advice.



Agreed. The Irish tax system and products are complicated, so good advice on that front is important.

The academic evidence is overwhelming; effectively, nobody over the long term, Regardless of how much they study, can offer market timing or fund switching advice that will beat being invested in broad passive market funds.


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## Dave Vanian (27 Nov 2020)

@Dave K I see you are now declining to answer questions which might clarify your earlier replies.

You were the one who said to the original poster...



Dave K said:


> While the charge may be higher else where, if you are getting solid advice you could and should expect a much better return even taking your risk rating into account and the higher AMC will be worth it.



You mentioned switching funds. You mentioned derisking for a period.  Yet when it was pointed out to you that doing these, also known as market timing, is detrimental to long-term investment returns, rather than explain how you think your suggestions would benefit people, you chose instead to suggest that it's up to each individual broker to find out for themselves.  Your claims that a person could and should expect a much better return would be a bit more credible if you were offering any backup for them as to how exactly these better returns might be achieved.  

I can claim on here that I have an investment that is guaranteed not to drop in value and will give me 15% per year returns every year.  Unless I can back up such claims with how I propose to achieve this claim, the claim itself is meaningless and not helpful to anyone on Askaboutmoney.


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## SPC100 (27 Nov 2020)

To be fair. I think there are studies showing that advisors can be worth their fees and can bring value.

Getting a client out of 'bad' (e.g. very active, high fees) funds have expected future value.

Keeping a client invested, or getting them to invest more in bad times, has value.

There is good advice and there is bad advice. Sometimes the quality of the advice is correlated with the price. Everyone says there advice is good. Especially if they are selling it or their livelihood depends on you buying what they are advising.


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## Sarenco (27 Nov 2020)

SPC100 said:


> Getting a client out of 'bad' (e.g. very active, high fees) funds have expected future value.


Indeed but @Dave K is arguing that "a higher AMC will be worth it if the client gets a much better return".  

That doesn't sound like an adviser that is laser focused on getting clients out of expensive funds.

The two greatest enemies of the equity fund investor are expenses and emotions.


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## Dave Vanian (27 Nov 2020)

Sarenco said:


> Indeed but @Dave K is arguing that "a higher AMC will be worth it if the client gets a much better return".
> 
> That doesn't sound like an adviser that is laser focused on getting clients out of expensive funds.
> 
> The two greatest enemies of the equity fund investor are expenses and emotions.



This...



Dave K said:


> At times yes I may recommend a client to switch a fund, maybe de-risk for a period of time etc.



...suggests belief in an ability to time markets, something that has been proven countless times to be a counter-productive exercise in the long-term.


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## HynesMA (16 Dec 2020)

Dave K said:


> HynesMA
> 
> 
> 
> ...


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## Gordon Gekko (16 Dec 2020)

An advisor can add value in excess of the differential between the cheap passive option and the active fund. But not on the investment side, more in terms of making the investor ‘stay in the course’ and in terms of navigating the planning side of things.


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