Increase in Davy Pension fees (from May 1st 2024)

It's all about choice really and facilitating competitive pricing for those that know exactly what they're looking for.

Some people value and have respect for what intermediaries may bring to a transaction. Any transaction.

You might even say that some value their contributions here so that they have the confidence to do an execution only transaction.

Some people don't. Never will.

I'm fine with that.

My inbox is filled every day with queries on matters like claiming tax relief, making top ups by EFT, requests for pricing on non-pension products on an EO basis (even protection ones), confirmation of how some of the pricing works and the interaction with other fund costs, requests for assistance with moving from providers with woeful service (and pricing), special off-book pricing queries for large cases, dealing with maximum funding issues on MT Executive pensions, fund switches, customer fallouts with advisors and transfers, tracking down clients with post that's gone undelivered, dealing with provider servicing issues where response times are poor etc etc. etc.

Had to stop answering the phone because it was either a) a scammer b) a tyre-kicker or c) someone who's opening line was 'I know you don't give advice but...'

So I guess I'm not surplus to requirements or 'insufficient'

Gerard

www.prsa.ie
 
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@GSheehy: I take your point, and I didn’t mean to cause offense, or to impugn you (or anyone else) personally. The examples you provide show that people do rely on you for other services, per the qualification in my earlier comment. And for what it’s worth, I always find your posts on this forum to be honest, insightful, and helpful.
 
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What about Standard Lifes pricing structure O option? It appears to give an even lower TER of 0.4% if going with the vanguard option when the 0.5% rebate is factored in. There is lower commission and no FBRC so maybe a broker wouldn't be happy to offer it but if it was on an execution only basis or directly with standard life, I don't see why not.

Or am I missing something?

 
@VOOVOO: The Standard Life "advisors only" brochure on PRSA Product Structures I have is from 2023 and lists only options A thru M. I was informed by a Standard Life direct client consultant in 2024 that a review of their pricing structures was underway, so presumably N, O, and P (and maybe more) have been added in the meantime.

Do you have a link to the website from which that screenshot is taken, or is it only possible to access it with login credentials? And do you know whether a PDF is also available?
 
Investor, thank you very much for taking the time to do this analysis, it's very intresting, and it also's very re-assuring! I think this is the best way for investors to actually figure out the real impact. I did simlar work decades ago on an old QL policy, when I was concered about 'hidden charges'.
 
@Investor One thing that confused me, The figures imply to me, that Vanguard drag is 0.1%, and the SL drag is 0.83% (12.01 - 11.18)?

I assumed that any SL charges are charged on the value of the Vanguard assets. And that any SL charges, would be after the vanguard OCF/mgmt fee/tracking error etc., i.e. that Vanguard drag is already applied, before SL charges are added.
 
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How can we explain SL drag being *less* than SL stated AMC?

One framing/hypotheis is that SL are stating the total AMC (theirs + vanguards) is 0.9%. And they 'mark up' from vanguard to 0.9%

Edit: I now think this is wrong, see later hypothesis around share class.
 
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@SPC100: Thanks for the acknowledgement!

I could be wrong—and maybe someone more knowledgeable than me can set me straight—but I think that your hypothesis is correct, and that in calculating the annual management charge, Standard Life are required by law to include all “management fees and other administrative or operating costs,” so that the stated figure of 0.90% would comprise both Vanguard’s charge for managing the underlying fund and Standard Life’s additional charge for setting up and administering the mirror fund.

So the total drag is actually marginally higher (0.03% ) than the advertised annual management charge of 0.90%. I'm unsure about the source of that discrepancy, but it's minor enough not to worry about.
 
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I did also look at the SID documents, but I didn't find them explicit enough. On the last page, it lists 0.9% AMC fees, it also list 0% for trasanction costs. Clearly there are transaction costs at some lower layers, so I assumed from that, that it was only showing SL costs. And that the 0.9% must be just Standard Lifes fee.
 
I have another hypothesis for the conundrum:

I think you did the maths for Vanguard's retail class of shares. But, I am guessing that SL uses the institutional class, and then SL simply apply a 0.9% charge.

Details:

I did some digging in the vanguard docs for the fund. Deep in the 1382 pages of the vanguard annual report! You can find the Global index fund details starting on page 188. On page 208, it notes management fees of 24 Million USD, and transaction fees and commisions of 0.8 Million USD along with a reference to note 12.

Note 12 is on page 1303 of the same doc, it states the vanguard mgmt charge for this fund (for 2023 and 2022) is 0.18% for retail, and is 0.11% for 'insitutional Plus Shares. So it appears mgmt fees are 0.07% less on on insitutional class.

If I update your numbers with that assumption - the figures line up nicely....

MSCI world IndexVanguard (insitutional share)SL mirror annualized
Annualized return12.11%12.08% (your 12.01 + 0.07 from cheaper AMC)11.18%
Reduction in yield.03% less than MSCI Index.93% less than MSCI Index
.9% vess than Vanguard
(figures assume you are on the 0.9% SL product)
 
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I also attempted to the same for the Royal London Ireland Developed world equity that also tracks the same MSCI world index as Standard life product is, but it does it via blackrock/ishares fund.

I used the sames dates as you did. And downloaded the historic RL fund prices from their website.

I was again a bit confused with the results though, the docs imply that the the RL prices are after AMC. But that must be fund AMC, and not the PRSA AMC. So I think, you would need to add on whatever the AMC of your RL PRSA is on top.

MSCI WorldiShares Developed World Index Fund (IE) Institutional Acc EURRL BlackRock Developed World Equity Index Fund
14/02/2018245.27210.59571
14/02/2024486.9941.591.1751
Cumulative return98.55%98.05%97.26%
Annualised return12.11%12.06%11.99%
Reduction in yield0.05% vs MSCI0.12% vs MSCI
0.07% vs Ishares

(I assume you have to the Ad the RL PRSA AMC on top of this)
 
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SPC100 said:
I was again a bit confused with the results though, the docs imply that the the RL prices are after AMC. But that must be fund AMC, and not the PRSA AMC. So I think, you would need to add on whatever the AMC of your RL PRSA is on top.
Click to expand...

The Funds Other Ongoing Costs and Portfolio Transaction Costs are included in the fund performance figures on the Royal London website. AMC is not.
 
Sarenco said:
I wonder is this related to the recent Bank of Ireland acquisition of Davy?

BOI also own New Ireland and I wonder is that where they want to place PRSA clients.
Click to expand...
Its just Davy. Their charges for everything are mush higher than other providers
 
@SPC100: Thanks for doing that painstaking work! You may well be right about the Vanguard Institutional Plus share class Ongoing Charges Figure of 0.11%. Presumably, Standard Life would qualify for the minimum initial investment required of €100 million given its significant market share of the total value of assets invested in PRSAs in Ireland, which was approximately €16 billion as of Q3 2024 according to the Pensions Authority.

It is satisfying to see those numbers line up, and a glance at the December 2024 fact sheet for the institutional fund furnishes another piece of corroborating evidence: its net annualized performance since its inception in December 2013 is listed as 12.49%, a tracking difference of only minus 0.03% from the benchmark performance of 2.52%—despite the 0.11% OCF—which is precisely the reduction in yield at which you arrived:

https://fund-docs.vanguard.com/Global_Stock_Index_Fund_9179_EUR_EN_INT_IRISH_UK.pdf

If you look at the fact sheet for the regular EUR acc share class with the 0.18% OCF (the minimum initial investment for which is €1 million, a sum that only well-heeled retail investors could afford), its net annualized performance since its inception in December 2002 is 8.90%, 0.19% lower than the benchmark return of 9.09%. Over the past 10 years though, it’s 11.55%, only 0.12% lower than the benchmark’s 11.67%, which seems to show that Vanguard are getting even better at keeping costs down for their clients, using all the tricks of the trade like skillful portfolio management and securities lending:

https://fund-docs.vanguard.com/Global_Stock_Index_Fund_9837_EUR_EN_INT_IRISH_UK.pdf

Separately, Standard Life appear to have added a Vanguard Global [developed markets] Small-Cap Index fund to their suite of offerings since last summer, so between that and their emerging market and global index funds, only emerging markets small-cap equities are not covered by the available Vanguard options, and at less than 2% of the global stock market, they wouldn't move the needle unless they were drastically overweighted in one's portfolio.

Finally, as for your remark that you didn’t find documents provided by an Irish life assurance company “explicit enough,” I believe that that might be a instance of what rhetoricians call meiosis.
 
Reading through this thread, no-one seems to have mentioned the material impact of Value Added Tax on relevant components of the AMCs being quoted?
 
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