# Brokers Commission on Pension Lump Sum



## Nipper (22 Mar 2010)

I am shortly reaching the retirement age on my pension policy with an Insurance company. My broker has advised that I can either discuss my options directly with the insurance company or, if I ask the Broker to arrange it. If the latter I will have to pay a fee of 1 to 1.5% to the Broker. 
Is it usual to have to pay such a fee (the Broker will already have got fees when the money went in) and can I negotiate the rate?


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## GSheehy (23 Mar 2010)

I don't think discussing your options directly with the Insurance Company is going to reduce the cost to you.

Are you buying an Annuity or are you investing in Approved Retirement Funds? 

Are you receiving advice on your options from the Broker or Insurance Company?



GS


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## Nipper (23 Mar 2010)

Thanks GS.
One of the things in need to discuss is what my options are - Annuity, ARF, maximum lump sum etc. I feel I need advice, but wonder if 1/1.5% would be a lot to pay for it?


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## GSheehy (23 Mar 2010)

It probably depends on what amount the 1/1.5% is of? Is it 20K or 200K?


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## Nipper (24 Mar 2010)

More Like 4200k


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## Nipper (24 Mar 2010)

Sorry typo on that last reply, should be €200k!


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## mercman (24 Mar 2010)

Welcome to the land of the devious. Nipper you are going to have to do plenty of leg work to find out the best deal for yourself. Wherever you invest your money the Provider are obliged by law to advise you of the earnings of the broker that has sold you the Policy.

Bottom line -- you will get nothing for free and once your money is invested it will be too late to change your mind, especially if invested in a Pension product.


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## tenchi-fan (24 Mar 2010)

Brokers get a lot of commission for selling pensions. If they're not getting good commission, you should be getting a better rate so your broker will charge you a fee for his service. In many ways a fee is more transparent because that way you know he's working in your best interest.

It really depends, do you need his advice? If that's the only pension you have, you'll probably just take the 25% tax free lumpsum and the best annuity rate you can find so start ringing pension providers to find out their annuity rate.

Very important: Don't assume you'll get a better rate if you go direct!

Your first port of call is to phone your life assurance company and ask for your retirement options. The broker who sold you the policy will usually receive a copy automatically.


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## Nipper (25 Mar 2010)

Thanks for the replies. It appears to me that between the brokers and the pension providers everyone has their hands in our pockets. They all received fat commissions during the boom, but now that pension fund returns have gone down so much none of us can afford their rates. We should all fight for a more transparent system, which is geared towards the interests of the pensioner and not everyone else.
Anyway, I'm going to attempt to deal directly with the providers, so wish me luck!
thanks, Nipper


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## TLC (25 Mar 2010)

I would suggest if you intend making a lumpsum contribution to your existing pension company, tell them you want it entered as commission free - I wouldn't be surprised if your broker is getting a small annual renewal commission for all your regular contributions - as them.


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## voodoobazza (20 Apr 2010)

Pay some one a fee and get some sound advice regarding your overall finanical plan. Planning at the point of retirement is crucial to get right, if you dont consider the cashflow, tax and legislative side of your actions you could end up in a mess. Go to a fee for service financial planning consultant and pay him/her.


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