# Equity based SSIAs - Summary of Options



## Brendan Burgess (28 Dec 2001)

<!--EZCODE BOLD START-->*  OPTION 1 - Quinn Life SSIA*<!--EZCODE BOLD END-->

The Quinn Life SSIA is the cheapest available. And if you believe that low charges is the most important criterion in choosing a unit-linked investment, then this is the one to go for. The only charge is an annual management fee. There are no entry or exit fees or other transaction fees. 

The fund choices are: 
Euro Freeway Annual Charge: 1% (Euro Stoxx 50) 
Celtic Freeway Annual Charge 1% (Largest 20 companies in ISEQ) 

US Freeway  Annual charge: 1.2% ( Tracks the S&P 500 Index)
Technology Freeway Annual Charge: 1.2% (Tracks the Nasdaq-100 Index)
Biotech Freeway Annual Charge 1.2% (Invests in large biotechnology Companies)

<!--EZCODE BOLD START-->*  Option 2 - Standard Life With Profits SSIA*<!--EZCODE BOLD END-->

If you can't handle the volatility of the stockmarket, you will get a smoother ride with the Standard Life With Profits SSIA. They don't guarantee your capital, but Standard Life has the highest reserves of any life company in Ireland and this should minimize the likelihood of any loss. There is a full debate on this subject 

If you decide to invest in this product, you should buy it on an execution only basis through  LABrokers  who will do it on a nil commission basis. 

<!--EZCODE BOLD START-->*  Option 3 - A broker office company*<!--EZCODE BOLD END-->

If you are not happy with Quinn Life or Standard Life, you can go to a broker based life office( e.g. New Ireland, Canada Life, Irish Life) or you can go direct to a fund manager (e.g. AIB, Bank of Ireland or the EBS) 

Most contributors to Askaboutmoney believe that the past performance of a fund manager is just not relevant. However, if you believe that it is relevant, then you have a vast array of funds to choose from. There is no advantage in going directly to these companies - you will be sold what is known as a full commission product. It is better to go through an execution-only broker who will deal with you on a reduced or nil-commission basis. The only nil-commission broker of which I am aware is LABrokers. This is an execution only service. If you know what you want, they will organize it for you commission free. If you want advice, they will charge you for it. 

<!--EZCODE BOLD START-->*   Option 4 - Other Direct SSIAs *<!--EZCODE BOLD END-->

After Quinn Life, the EBS is the cheapest of the direct fund managers. The only charge is 1.5% annual management charge. There is no entry or exit charge. An investment return of 8% will be reduced to 6.5% after these charges. 

The life insurance subsidiaries of AIB and Bank of Ireland, Ark Life and Lifetime have the largest share of the SSIA market, despite their high charging structure. An investment return of 8% will be reduced to about 5.5% by charges.


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## Joe Nonety (29 Jan 2002)

I was going through some of the other companies equity based options and I realised that they offer good value even if the have a wide variety of charges i.e. Annual management charge, entry charge, bid/offer difference, policy fee per month, etc. But they also have such things as loyalty bonuses to make up for it.

Including all their charges, here is my best calculation of what their annual management % works out to be based on €254 per month... (I did my calculations based on labrokers.ie figures).
However Ireland.com have a completely different set of figures at [broken link removed]
I suppose by right I shouldn't be comparing the investment providers but the actual brokers e.g. labrokers, Aon as they seem to be the most significant 
Standard Life :      1.18%
Irish Life :   &nbsp &nbsp &nbsp &nbsp 1.21%
Hibernian :    &nbsp &nbsp &nbsp &nbsp 1.24%
Canada Life :        1.28%
Friends 1st :  &nbsp &nbsp &nbsp &nbsp 1.43%
New Ireland : &nbsp &nbsp &nbsp &nbsp 1.43%
Scottish Prov :      1.48%
Eagle Star : &nbsp &nbsp &nbsp &nbsp 1.65%
Note: Quinn Life and EBS have straight forwards rates of 1% and 1.5% respectively.

The difference between the first 4 is only 0.1% which works out to be €20 on €20,000, so definitely other properties should be considerated when deciding e.g. 
1. Can you switch between options for free?
2. How easy can you switch between options? (e.g. if you have to do it in writing you might have missed the boat, while if you can do it by phone or by internet it will enable you to react to the world economic climate immediately.
3. Can you split your money between options?
The answer is yes for Q1 and Q3 for EBS, Irish Life and Eagle Star.
With Irish life you can change your options on the internet.
One statistic that is reckoned to be insignificant is past performance although maybe that's because they've all done so badly in the last year.
However even when you include charges, a 5 year investment scheme would have beaten a 5 year fixed rate scheme 17 years out of the last 20. (In 1993, you'd have actually made a loss!!!)
One other thing you might also want to consider is something I know nothing about which is carpet bagging i.e. which of these companies is there an even remote chance of getting free shares off of? (anyone have any ideas?)


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## rainyday (31 Jan 2002)

Joe - I understood that the Irish Life/Irish Permanent charging structure was 1.65% fund management charge plus 5% bid/offer spread. I was advised that the bid/offer spread was negotiable.

Can you (or anyone) advise how labrokers would have got a 1.21% fee from this 1.65% admin charge?

Regards - RainyDay


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## John Geraghty (31 Jan 2002)

*LABrokers*

LABroker's reinvestment of full commission on Irish Life's SSIA increases the allocation rate. It does nothing to the management charge. Site states 'Management charge: 1.65% per annum'. 

On a Nil commission basis the effective reduction in yield would be in the order of 1.3% compared to the full commission product at 2.8%. (aft 5 years).

John G


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## rainyday (31 Jan 2002)

*Re: LABrokers*

Thanks for the clarification John.

Joe Nonety - Can you clarify the figures you are quoting above. Are you quoting RIY figures or management charges?


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## Joe Nonety (4 Feb 2002)

*Re: LABrokers*

My figures were from labrokers.ie website where they give a figure of what your fund will be worth after the 5 years assuming 8% growth.
I worked backwords and certainly made sure to give no heedence to the figure of 8%.

For the Irish Life figure, the reason why its so low is because I've taken the 5% loyalty bonus into account.

:hat 

PS Anyone able to give me an answer to my carpet bagging question?

Also would I be right to assume that for Quinn Life's SSIA, there will be no active management?


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## Joe Nonety (5 Feb 2002)

*Re: LABrokers*

OH OH, I realise that my calculations were based on end of year government contributions, so the actual average % management fee is much higher than I thought.  
I'll get back to ye when I work out what would an €254 pm investment equity pay (after tax) if it had no charges whatsoever and it grossed 8% per annum with the goverment contribution added monthly.
Its time to test out the 'ol excel skills!!!


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## practitioner (8 Feb 2002)

*ssia*

I see from the above that hib/eagle etc all have just 1-1.4 % management charges.
But what about the bid /offer spread????
will that not take a further 2.5-5% off the annual gain?
For example Hibernian say a 1.2% roughly management charge when through LABROKERS but there is a further 1.50 EURO monthly charge and also a bid offer spread.
Does the EBS 1.5% or quinn !% charges alone not beat this hands down?


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## Liam D Ferguson (8 Feb 2002)

*Clarification : Hibernian*

Hibernian don't have a bid/offer spread.

Liam D Ferguson
www.ferga.com


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## Sumatra (8 Feb 2002)

*Clarification : Hibernian etc*

Hibernian's annual management charge is 2%. If you go the non commission route its 1%.

The effects of charges on equity based SSIAs over 5 years was illustrated in a table produced by Becketts for the Irish Times on Dec 6th: Some providers appear twice dur to "variance in allocations for commission and non commission options" : Its a brilliant table pity it can't be repooduced in full here. I couldn't find it on the Irish Times site.

If you want to concentrate on charges rather than the bigger picture then here you go: 


1. Quinn Life    1.1%
2. Eagle Star Secure   1.1%
3. Standard Life (non commission) 1.1%
4. Hibernian (non commission) 1.3%
5. Irish Life (non commission 1.3%
6. Canada Life (non commission) 1.4%
7. EBS 1.6%
8. Friends First (non commission) 1.9%
8. Standard Life  1.9% 
10 Ulster Bank / Hibernian 2.0%
11 ACC / Canada Life 2.3%
12. Canada Life  2.2%
13 New Ireland (non commission) 2.2%
15. Eagle Star Matrix (non commission) 2.3%
16 Hibernian        2.4%
17 First Active / Friends First 2.5%
17. Ark Life      2.5% 
19 ACC / Irish Life 2.6%
19 Lifetime 2.6%
21 Scottish Legal 2.6%
22 Irish Life/ Irish Permanent/ TSB/NIB 2.8%
23 Aberdeen 3.0%
24 Royal Liver 3.1%
25 Friends First    3.2%
27 New Ireland 3.8%
27 Scottish Provident 3.8%

Acorn Life = ?
One Direct = ?               

Regards,

Sumatra


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## Joe Nonety (23 Mar 2007)

I know the last post to this thread was over 5 years ago but it's become relevant again.
Is anyone getting the same low management rates to keep saving to their SSIA account after maturity as they did when they first opened it or do the terms change after maturity?


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## ClubMan (23 Mar 2007)

Well _QL_ and some others charge nothing other than a c. 1% annual management fee if that's what you mean?


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