# LA Brokers - cheapest deal on offer



## stuffit2003 (17 Sep 2003)

LA Brokers website ( [broken link removed] )
is offering a PRSA with Irish Life  

0%  Entry charge
1%  Annual management fee decreasing to 0.85% as the fund increases in value.


Site doesn't mention the execution only cost or say when the 0.85% rate applies.  


Does anyone have any info/opinions on the product.




Stephen


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## POAP (17 Sep 2003)

*Irish Life*

[broken link removed] I would presume it is this product


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## S (17 Sep 2003)

*LABrokers PRSA*

No execution only cost. No fee.

No upfront or monthly charges.

Only charge for life of the PRSA is the 1% pa management fee

Management fee decreases:

0.95% when fund reaches €150k.
0.90% when it reaches €250k.
0.85% when it reaches €500k.

Funds:

Consensus, Pension Protection Fund (Fixed Interest),Cash Fund. Default investment strategy switches into more secure funds in the five years before retirement date.

Contribution: weekly, monthly, half yearly, yearly. 
Deducted through salary or stand alone. Employer can contribute. 

Option to increase for inflation.
You can contribute a lump sum, or transfer in. 

Transfer to another PRSA provider if required.

No tie in to rigid payments. You can stop, start, take a break whenever required. 

Written statements from Irish Life given every 6 months.
Dedicated phone line for valuations (late 2003)

Min €25 a month.


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## Savy (18 Sep 2003)

*Re: LABrokers PRSA*

As far as standard prsa funds go,Consensus is their hightest risk/benefit fund. This is only described as a medium risk return and may not be the best option for people with >15 years to go before retiring.
The reason is that the fund will not grow by as much as if it had being in a higher risk fund.
The fund risk is proportional to the length of time to retirement(if you want to maximize your fund size).

S


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## ClubMan (18 Sep 2003)

*Irish Life PRSA*

Whilst the sliding charges seem enticing they will only benefit somebody paying in a lot every year or else in a high growth situation. As far as I can work it out somebody putting 200 euro (rising with inflation) a month into a scheme would need to see high net growth before the sliding scale would make any difference.

```
[u]Growth NPV of final Fund[/u]

Standard PRSA              7%        €149,168.21 
Irish Life Standard PRSA   7%        €150,541.33 
                
Standard PRSA             10%        €274,923.84 
Irish Life Standard PRSA  10%        €279,207.75
```
Assumptions 3% inflation, 30 years old, retirement age 65, 0% contribution charges.


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## Sumatra (18 Sep 2003)

*PRSA*

Savy, investors should not only look at the rewards of holding equities but at the risks. Consensus is lower risk. You wont get the best returns but you certainly wont get the worst and thats what matters to the 64% of respondents to the National Pensions Policy Initiative whose main reason for not taking out a pension was simply 'I don't really understand pensions'. 

Irish Life use inflation assumptions of 0%, CPI, min 5%.


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## AidanB (18 Sep 2003)

*LA Brokers*

Hats off to LA Brokers for coming out with a true saving but I couldn't give Irish Life another cent of my money ! Great at marketing. Great at losing money - my money and every member of my family. Very disappointing.


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## Savy (18 Sep 2003)

*Re: PRSA*

Sumatra,
My point is that I have 30-35 years to go before retiring.
I dont want my fund spending all that time with average growth but instead have it exposed to some risks for 15-20 years to potentially create a larger fund at retirement.

Of course many people are risk averse and they should definitely not have their money invested in high risk funds if that is not what they want.

BUT, Irish Life do not have a high risk fund under the standard PRSA but instead you have to look at non-standard PRSA's they have on offer.
These funds then have a management charge starting at 1.35% pa
I think that their are better offers available for people with more than 15 years before retiring.
S


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## Sumatra (18 Sep 2003)

*RRSA*

Savy, I agree with your view on equities but I also appreciate your comments that you recognise your philosophy is not for everyone. Perhaps they are not the target group that would feel comfortable with such a risk strategy. 

Companies introducing Standard PRSA reassessed the situation and attempted to address persons pre existing prejudices. This was all in their efforts to pin point the reasons for non coverage and naturally use this to achieve the desired effect. From the offerings I have seen so far, I think they have done well.

There should be no non standard PRSAs. They confuse issues and instead they should be classified and marketed as 'pensions'. The word 'PRSA' should be associated with one clearly defined product range and nothing more. 

The population which 'still' has no pension provision is hardly going to suddenly educate themselves and run the risk of investing in higher equity products as you suggest. I feel they need the confidence of knowing the risk is managed for them. 

Glass half full - Standard PRSAs will work. All this moaning and groaning about high charges, affordability, flexibility, portability, complicated products, lack of transparency etc is gone. Wake up everyone smell the roses. Standard PRSAs are a great product and long overdue!

Glass half empty - deep down no one wants it to work - afterall its the responsibility of an enhanced state pension system.


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## Savy (18 Sep 2003)

*Re: RRSA*

In my opinion non-standard PRSA are a great little trick on the consumer.

1)A lot of people are been told that PRSA's are making pensions much simpler(and they certainly are)

2)When these people want to invest in to a fund, you can be sure that they will be advised to go with high growth funds that move to safer funds as retirement approaches.

3)Non-standard PRSA's are more likely to be higher growth/risk than the standard prsa's(since you pay more for actively managed funds)

4)The buyer may be fooled that because it has the word PRSA(even though its a non-standard one) that this is the way to go.

From what I have seen most decent personal pensions(nil-commission) have lesser charges than these non-standard PRSAs...and so the buyer ends up paying more.

This is the risk.

S


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## ClubMan (18 Sep 2003)

*Re: RRSA*

I noticed the lack of fund choice (particularly nothing with a higher risk/reward profile than the consensus fund) myself when perusing some of the offerings. That's what put me off Irish Life - I would like to invest in one or more funds with a higher risk/reward profile. Speaking of fund choice, I originally got the impression that all Standard PRSAs would implement only a Default Investment Strategy and that individual fund selection would be an option on only Non-Standard PRSAs. However I see that while all Standard PRSAs must offer a DIS some of them allow savers to select individua funds as well. I was surprised - maybe unnecessarily. 

The arguments over the pros and cons of the PRSA scheme, other pension options, charges etc. should not detract from the underlying fundamental issue that most people need to start putting some sort of money by in preparation for retirement!


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## Tom (18 Sep 2003)

*PRSA*

Just imagine for one moment that these products were initially intended to be bought - off the shelf. 

Given too much choice people can't make a decision. With a PRSA each company should put their best foot forward and that goes for fund choice. 

One of the aims of a Standard PRSA was to make sure contributors who are not fully catered for by the present system are fully aware of the nature of the investment risk they are undertaking.


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