# Danica Pension



## boaber (8 Jun 2007)

Was browsing through the appointments section of the IT today and noticed that a company called Danica Life are recruiting for positions starting later this year.

They will be selling their products trough NIB in late 2007 (have same parent group, Danske Bank).

Just wondering if there is room/demand in the marketplace for another provider?  After all, a lot of the life companies have merged together (Hibernian/Norwich Union/CGU/Ark Life; Canada Life/Abbey Life etc..)

Yes, it may increase competition, but will they really make a big impact and take a sizeable market share from the established companies?


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## LDFerguson (8 Jun 2007)

Bearing in mind that the whole bank / life assurance company link is so successful in other areas (AIB / Hibernian, Bank of Ireland / New Ireland etc.,) I'd imagine that they will initially get their market share from National Irish Bank branches.  When you've got a relationship with a big...er...bank of customers like NIB do, it won't be hard to sell them other financial services, even if the products on offer aren't necessarily cutting edge.

By rights, the discount life assurance brokers like www.labrokers.ie and www.123.ie etc., should have a virtual monopoly on Mortgage Protection policies, but the banks still sell dearer Mortgage Protection and Term Life cover by the bucketload.


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## Protocol (8 Jun 2007)

More competition is always good.

Anything to reduce the commissions on pensions/investments is good.


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## Guest126 (8 Jun 2007)

They are not coming here to reduce anything - I am sure they are coming here because they have seen that there is money to be made, not to reduce prices for Ireland.

If you don't want to pay commission - then use a fee only advisor.


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## Protocol (9 Jun 2007)

Yes, I agree, fee only advisers are possible currently.

However, anything that makes the mainstream commission-based advisers more competitive is a good thing.


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## Protocol (9 Jun 2007)

It's simply unreal the savings to be made by bypassing traditional broker for pensions/investments.

BUT

Most people don't know the first thing about it.


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## ClubMan (9 Jun 2007)

Most people don't make much of an effort to shop around or educate themselves when shopping for financial products. Even more so than most other purchases as far as I can see. Caveat emptor.


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## Guest126 (9 Jun 2007)

Agree Protocol about savings to be made BUT
bankassurers are the very very last people to expect a good deal from, they simply take advantage of customer inertia.


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## boaber (9 Jun 2007)

LDFerguson said:


> I'd imagine that they will initially get their market share from National Irish Bank branches.



This might get them a share of the individual pension business (PRSA/PPP) and life assurance products, but can they really make an impact on the Group Scheme Business?

Protocol - the life offices offer a wide range of products, some of which are based on nil commission.  It is the independent financial advisor that chooses which product to use and how much commission to charge - not the life offices - they simply provide the products.


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## Guest126 (10 Jun 2007)

Group Scheme business is a relationship business - it is usually non commission and fee based - the bankassurers have a very small portion of this business.

Also in relation to commissions...remember that when life offices sell products directly their own DIRECT products usually apply the full commission so that is why I would not be expecting a great deal from a bankassurer - the banks have for some time sold notoriously bad value pension and investment products.


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## boaber (10 Jun 2007)

CapitalCCC said:


> it is usually non commission and fee based - the bankassurers have a very small portion of this business.



I disagree with this...I have worked in several life offices and most schemes are commission based - it depends on the broker if they charge commission or a fee, but in my experience, the vast majority use a commission based structure.

Both New Ireland & Irish Life have a huge number of group schemes, so I wouldn't call this a small portion of the business


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## Guest126 (10 Jun 2007)

I think you will find most of Ireland's largest schemes are managed by the Mercer/Coyle Hamilton/Marsh type companies - the multinational brokers, they use the insurance cos you mentioned to insure the risk biz but usually administer the large pension schemes themselves on a fee basis.

No bank assurer has a large segment of group biz.


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## LDFerguson (11 Jun 2007)

> Both New Ireland & Irish Life have a huge number of group schemes, so I wouldn't call this a small portion of the business


 
I think Capital CCC refers to bancassurers as the bank sales channels of life companies.  While New Ireland and Irish Life do indeed have a sizeable chunk of the group market, the bulk of this is through brokers rather than from bank sales staff.  Do I have any statistics to back up this assertion? Nope - just my own experience.  But I won't let that stop me.


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## boaber (11 Jun 2007)

That was what I was trying to point out (very badly!!)

Have you heard much about Danica?  In particular what Investment    Manager(s) they would be using?


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## CCOVICH (11 Jun 2007)

I would have thought that Danica would use the same investment manager that is responsible for the funds offered by NIB?


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## indiekid (11 Jun 2007)

Hi - on this subject of fees taken by brokers etc for managing pensions - I have looked into transferring my pension amount from my previous job and putting it into a pension bond - which involves paying the equities company who run the fund 0.5%, and then paying the pension admin company (Irish Life) 0.5% and paying the broker 0.5%. So I would be paying 1.5% of the fund every year for the next 30 years. is this competitive? It seems like a lot to me. If I go to other brokers will it just be the same story?


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## ClubMan (11 Jun 2007)

indiekid said:


> which involves paying the equities company who run the fund 0.5%


Do you mean an annual fund management charge of 0.5%?


> and then paying the pension admin company (Irish Life) 0.5% and paying the broker 0.5%.


Are you sure that these are ongoing charges and not once off charges?


> So I would be paying 1.5% of the fund every year for the next 30 years. is this competitive? It seems like a lot to me. If I go to other brokers will it just be the same story?


I suspect that there may be better value out there. Depending on the size of your fund you may be able to get a greater than 100% allocation rate which may offset or cancel out any once off commissions charged and then an annual management fee of c. 1% (maybe more - maybe less). Some number crunching may be necessary to find out how the different charging structures compare over your planned investment period. If in doubt get independent, professional advice - e.g. go to an authorised advisor or a good multi-agency intermediary. Check out some of the discount brokers mentioned in this forum for example.


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## LDFerguson (11 Jun 2007)

Charges you quote for Irish Life seem excessive.  We have a version of the Irish Life Personal Retirement Bond product with no entry or exit charges and total annual management charge of 0.65% for index-tracking and consensus funds, 0.75% for Irish Life Managed funds.  

Liam D. Ferguson
www.ferga.com


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