ARF Questions to ask broker

Hi,

I would appreciate if someone knowledgeable would post a simplified full listing of questions that I should be asking my broker on choosing an ARF/AMRF. I'm 54 so there will be no early encashment in the first 5 years.

I want to ensure from the outset that I'm not leaving any questions unasked especially regarding fees/charges.

Thanks

There is no imputed distribution you mean. You have to be at least 60 for the full year for it to apply, so unless you are born on 1 January, it won't apply until you are 61.

If you

1. What is the set up charge?
2. What is the ongoing charge?
3. What is the allocation rate? i.e how much of my money actually gets invested?
4. How much are you getting paid?
5. Do early exit penalties apply in the first 5 years?
6. What is your process for deciding on investment strategy?
7. If in 3 years time, there is a global recession and I'm not sleeping at night with worry, what do we do?

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

Thanks very much Steven.

You should also consider:
- What investment options(funds) are available
- what costs are associated with switching funds
- what ongoing advice will you receive, particularly if the broker is getting a trail/annual fee
- if you are subject to early encashment penalty in first 5 years then you should be getting an allocation rate higher than 100% (probably c103%)

Since you are not required to draw down any income until age 60, the only reason you should be subject to any early encashment charge would be if you switch provider.

Thanks Conan.

To add a couple more to your list...

- Why are you recomending this specific provider?
- What are you basing the recommendation on? Please provide supporting data
- Are you in any way tied to this provider?
- Re the on-going charges - are they based on annual mangement charges (AMC) or the more accurate on-going cost factors (OCF) or Total Expense ratios (TER)? If AMC based can you provide estimates for OCF/TER?
- If providing on-going advice can you provide details on your experience and credentials ?
- Can you provide specific examples of situations where you or your firm has added value to your clients?
- What is your investment philsophy and what investment approach do you recommend for me and why?

By the way Daddy Ireland - this is a great post you have started!
If everyone asked a prospective adviser most of the above, I am very confident it would help seperate the wheat from the chaff, i.e you will be able to suss out those that just want to flog you a product, and those that want to provide a good service and have the capability to deliver that service.

If in doubt keep asking questions untill you are fully satisfied you can make an informed decision

I am smiling at the thought of your meeting with your broker... they might not be expecting this...

All the best Vincent

Thanks North Star.

I have to admit that I am taken aback with all of the questions that you all have suggested should be asked before venturing down the ARF route. It is mind boggling for ordinary people to have to comprehend what they should be asking and to interpret some of the answers no doubt to. It sure is no simple process. I had to ask the question in the first place as a Google search came up with some threads from Askaboutmoney on the topic but very little else to go on. Why the whole process cannot be more simplified is beyond me. I will be asking for clarity in a lot of things in plain simple language that a lay man can understand.

It's not easy, that's why you are going to pay an expert for advice on the best route to take. If you go to a good advisor, they will help you understand what is required, formulate an investment strategy that suits you and remove as much hassle as possible. Go to a salesman, you'll get rubbish.

Another question, ask the advisor if they are willing to do the work for a fee.

Steven
http://Www.bluewaterfp.ie (Www.bluewaterfp.ie)

SBarrett quote {go to a salesman ,you,ll get rubbish} is so so true !
From experience avoid the Bank Advisors ,they maximise most charges and give very good brochures.
Suggest come back here with whatever you get offered and Mr Barrett will keep you on track !

I read regularly how important it is to have a good fund manager. Can anyone suggest good fund managers at the moment. If the fund performs well this will compensate for high fees. I am in the process of transferring my pension from Standard life GARS (poor performance ) and trying to decide what low risk fund to transfer to. Any advice welcome.

How long have you been invested in the GARS fund? As a low risk fund option it has more or less delivered its target return. It has averaged 3.7% pa on average over the past 5 years. Performance recently though has been quite poor. If you are looking to beat that sort of return you are probably moving more towards medium volatility/risk funds.

Gerard
www.proactivefinance.ie

ABank said:

I read regularly how important it is to have a good fund manager.

Click to expand...

Where do you read that. I read regularly that the average fund manager underperforms the index, BEFORE fees.

See this from morning star for example.