Aviva vs Zurich for pension

[Herbie]

I am trying to decide between Aviva and Zurich as I'm transferring an existing pension away from a previous employer's DC scheme. I have a couple of policies (old BOBs) with Zurich and am happy with both customer service and fund performance. Aviva has been offered as an alternative for the new funds as they offer a slightly lower AMC and they have a different fund offering to Zurich so it might add a bit of diversity to my investments.

Zurich seem to be better regarded for fund performance and customer service. Would you see a major difference between them?

Also, I'm around ten years out from retirement. I'd like to maximise returns over than period and, should the market take a dive around the time that I retire, am happy to take on any sort of work to tide me over and help minimise my dependency on the funds. My current fund choices are almost entirely equity-based and I'm comfortable with market fluctuations. All that said, I know that the sensible thing to do is to lower equity exposure somewhat as retirement approaches. Should I be looking at more diversified funds from either provider, and if so, which ones? Something like the Aviva Fixed Allocation funds maybe?

 

[GSheehy]

What's driving the desire to move from a company that you're happy with service and fund performance from?

What's the differential in AMC? Will there be 'new' early exit charges on the Aviva product?

What type of (asset mix) fund/s are you thinking of investing in with the post-retirement product (ARF)?.


Gerard

www.prsa.ie

 

[Gordon Gekko]

It never ceases to amaze me when people who are happy with a product or service have their head turned by someone else.

If you’re lucky, your experience with Aviva will be good. If you’re unlucky, it’ll be bad. Where you are currently is good. Therefore, you should stick with Zurich.

 

[Herbie]

Apologies - I worded that badly. The scheme that I'm planning to move is with a third insurance company (i.e. not Zurich or Aviva). I'm not happy with that third company in terms of customer service and because the company scheme has a very limited and somewhat poor range of funds. I have some policies from previous employments with Zurich and my experience with them has been good so they would normally be my preferred option. Aviva is a second option which is slightly cheaper and offers the prospect of different fund offerings.

@GSheehy, the difference in AMC between Zurich and Aviva is small, 0.2% at most. It's not a major factor, just a feature, along with an alternative fund choice. In terms of asset mix, I'm not sure. I like the growth prospect of equities, I can accept the volatility that comes with that but have one eye on my ten year timeline to retirement and am wondering if I should be more prudent, and if so, what asset classes I should invest in. Zurich's pure bond funds seem to give a very limited return, close to zero over the last five years. I am already invested in their Dynamic fund, Performance fund, Indexed Top Tech 100 and Indexed Global Equity funds with my other pensions with them. Lower risk funds that I've looked at don't seem to offer that much of a safety net on market drops and limited gains on the market gains. Something like the Aviva Fixed Allocation funds (e.g. Fixed ESG 60 or Fixed ESG 80) seem to have offered a decent return with an asset mix.

 

[GSheehy]

ESG 80 = 80% equities
ESG 60 = 60% equities

Performance Fund = (currently) circa 80% equities (Article 8)
Balanced Fund = (currently) circa 60% equities (Article 8)

If you want to look in the rearview mirror on those, I'd say the difference isn't great.

Would be surprised if you couldn't move the remaining scheme to a ZL product with the same/better AMC as you've been offered.

Zurich's pure bond funds seem to give a very limited return, close to zero over the last five years.

And the return from similar bond funds from other providers has been what, over that period?

Obviously don't know the full story but if markets did take dive at retirement you don't have to mature them all all at the one time and you have another 20+ years of investment after that. I get why you'd want to secure/lock-down some of the value as retirement nears but it really depends on your bigger financial picture.

Gerard

www.prsa.ie

 

[Herbie]

T

ESG 80 = 80% equities
ESG 60 = 60% equities

Performance Fund = (currently) circa 80% equities (Article 8)
Balanced Fund = (currently) circa 60% equities (Article 8)

If you want to look in the rearview mirror on those, I'd say the difference isn't great.

Thanks @GSheehy - when I see it put like that I can see that I'm overthinking things a bit and that Zurich will probably suit me just fine

Would be surprised if you couldn't move the remaining scheme to a ZL product with the same/better AMC as you've been offered.

I'll investigate - thanks

And the return from similar bond funds from other providers has been what, over that period?

It's the same with Aviva. Thinking about it again, it seems that the manual approach of selecting various asset classes isn't for me as I don't have sufficient knowledge and I'd rather invest and things work away in the background. From time to time, I read about moving to less volatile asset classes as retirement approaches and I've felt that I really should do something about it but, as you say, my investment horizon extends well beyond retirement and I think that a managed fund will suit me best both financially and tempermentally.

Thanks again for your response.

 

[ClubMan]

To some extent the "gradually switch to less volatile lower risk/reward asset classes approaching retirement" advice probably comes from a time when the main or only (and one time only) option was to buy an annuity with one's pension pot at retirement. And protecting the pot from a sudden drop in the years approaching retirement and annuity purchase was arguably more of an issue.

But, these days, when continued investment via ARFs or vested PRSAs etc. after retirement is much more common, and "staggered" partial retirement of pension funds is also easier to arrange, one needs to consider what's the best investment strategy for the longer term (lifelong) investment timeframe. For this reason many people would temper the original advice or even suggest that continued investment largely or solely in equities might be advisable in some, and perhaps many, cases.