MattressMan
New Member
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100k in Raisin perhaps and remainder in low risk managed fund with blue chip equities.Thanks for the replies. I’m currently making pension contributions that maximise the tax benefits. Just looking for somewhere to stick the lump sum really.
Hi All, I’m looking for somewhere to invest a lump sum of 300K while minimising Annual Management and other charges. Does anyone have any suggestions? Risk appetite of Irish Life Map 4 / Zurich Prisma 4.
What does 101% allocation mean?
How does the product provider recoup that cost ? And where do they disclose it.On every investment/savings contract there is a 1% Government Levy. That levy is on the investor/saver so it's an additional charge and equates to circa 0.15% per annum, as an entry charge, in a Key Investment Document (KID).
With some investments the product provider covers the cost of this by allocating an extra 1% to your investment.
You invest €10,000, the 1% Government Levy is deducted and paid to Revenue giving you a 'premium' of €9,900.
The 101% allocation is applied to this premium and that brings your investment back up to €10,000. That €10,000 is then used to buy units in the fund.
The 101% Allocation is generally stated on the policy schedule.
If the 1% Levy wasn't there, I think that we would have more competitive Annual Management Charges.
Gerard
www.bond.ie
This is an obvious gap given you are the sole income in the household and have young kids.Other information which might be relevant
Life insurance: None
When an increased allocation is used to reduce charges remember to add the extra to the charge taken.@cremeegg
If you take my post above #7 where AMC is 0.65%, the 1% is recovered via that as there are early exit charges in first 3 years. They recover it in 2 years.
They're not going to make much on the transaction if you only stay 3 years but they hope you'll stay invested longer.
It's usually disclosed at the point of sale, as it's a plus for the client and then stated on the policy schedule in the form of (something like) - 101.00 % of Premiums excluding Levy Used to Purchase Units at the Ruling Bid Price
Gerard
www.bond.ie
Surely that's wrong:When an increased allocation is used to reduce charges remember to add the extra to the charge taken.
€100
101% allocation
€101
Charges
1% levy
0.65%amc
€101 x 1.65% =1.665% charge rather than 1.65%
I’m drawing attention to the fact that if you increase the initial value by smoke and mirror allocation rates they take more than 1% back againSurely that's wrong:
Fund after deduction of 1% levy = €100 0.65% AMC = €0.65
Sorry, but that doesn't wash. Yes if you add 1% allocation you increase the AMC. But then you deduct 1% Levy and that reduces the AMC by the exact same amount. Are you standing my your assertion that after both the 1% extra allocation and the 1% levy that the 0.65% AMC becomes 0.665% of the initial investment?I’m drawing attention to the fact that if you increase the initial value by smoke and mirror allocation rates they take more than 1% back again
I didn’t say the AMC increasesSorry, but that doesn't wash. Yes if you add 1% allocation you increase the AMC. But then you deduct 1% Levy and that reduces the AMC by the exact same amount. Are you standing my your assertion that after both the 1% extra allocation and the 1% levy that the 0,65% AMC becomes 1.665% of the initial investment?
How?I said an increased allocation has the effect of increasing the fees deducted
Look, you said 1.65% becomes 1.665%. BTW I just notice that you meant 0.65% becomes 0.665%, a mistake which I actually followed.I didn’t say the AMC increases
I said an increased allocation has the effect of increasing the fees deducted
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