New Ireland Assurance fees commission charges

Barbie doll said:

If I keep getting it wrong then why didnt New Ireland clearly state that I would never be told exactly what the charges etc where and why bother telling you what they charge. This is misleading everybody and the only people benefiting from this, is New Ireland Assurance. What does everybody else think?.

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They didn't mislead you.

Your policy document clearly states the charges as a percentage. You were happy to accept this. New Ireland serviced your policy in line with their terms of service. And now you're moaning that no one will work out the charges in monetary terms.

Yes, life companies used to make their charges unnecessarily complex. But your policy seems to be pretty straightforward. In future, keep better records of unit holdings and policy values when they are sent to you (usually on a yearly basis), and hire an accountant calculate any additional information you require e.g. exact monetary charges.

The really annoying thing about you, Barbie, is you are just complaining for the sake of it. You don't seem to be looking for advice, you don't seem to think you were overcharged, you have no complaints about your policy value, yet 10 years later and out of the blue here you are complaining over nothing!

And what if they told you , Barbie, your total policy charges were €4,381.56. What can you do with this useless piece of information? It's just irrelevant. It's not going to change the current value of your policy, it won't affect its future value, it probably won't have any correlation to the current year's charges or fund performance. I just don't understand what the issue is!

Tenchi do not speak to me in that manor it is abusive in nature. Furthermore, no one is forcing you to make comments. If I am entitled to a statement of account then it is up to New Ireland Assurance to provide it.

The financial services firm takes these charges direct from your investment or pension contribution or from your fund. This reduces the amount of your money that is invested or reduces the value of your fund> Hence what is the value of this deduction. Its quiet simple and no, if I chose to know its amount in € that's the way I prefer and I am not afraid to stand up and say so. So your attempt to laugh at me doesnt worry me at all. Futhermore, if what I am asking makes the industry uncomfortable then so be it.

If the financial Regulator found errors in the manor of charging in the past then I am right to question the deducted amount.

I pay New Ireland Assurance to provide me with these deductions and therefore I dont require your services. If New Ireland states they are satisfied that the charges are correct then I presume they should be able to provide me with a copy. Now are you saying that cant be true!

They will just say their systems are tried and tested, and they have no reason to believe you may have been overcharged. It sounds like you already got this response.

You ARE entitled to information on your policy. The type of information is set out by the financial regulator and probably the pensions board in the case of pension policies. I'd bet money that you receive an annual benefit statement every year which contains all the info you're entitled to.

Actually that's not what they said. You appear to attack anybody who challenges the way they operate. If you read any of the above then you would know that my enquiry stemmed from the fact that they deducted their fee on a daily basis. So telling me their fee was 1.65% left me asking myself 1.65% of what?

I can definitley see from the use of your laugage and the constant reference to the minium Legal Requirement is definitley telling me you are still employed in the industry.

In order to know what the fees etc are I would have to know the daily balance at the time these deductions were made. Futhermore, if their statment even said at the time our fees were drawn your investment stood at....would definitely help to clarify these charges. You are wrong if all these fees amounted to €4,381.56 then why not state it the fact that they wont is what has me wondering.

Guys,

Important issues are getting raised here. Let's keep on topic....

OK, let's assume that Barbie is able to obtain a line by line breakdown on a daily basis of the annual management charges in Euros. Would this equate to the total actual charges on a policy. The answer is sadly not and that is the real reason why paying an Actuary a couple of grand would be a waste of time.

Permit me to elaborate slightly.

The annual management charge is simply the cost that an Insurance company is required by legislation to disclose but significantly this charge does not include other costs such as custodian and administration fees (in other jurisdictions such as the UK there is a legal requirement for these additional costs to be shown in a Total Expense ratio or TER).

Now, let's assume for sake of argument that all Irish Insurance Companies somehow manage to offer all their investments without paying a cent for administration or custody.

Would the annual management charge represent all the costs?

Again, sadly not. There are additional costs associated with running an investment fund such as stamp duty, brokerage commissions, bid ask spreads, and the more a fund changes it's holdings, the greater these costs are. Remember that stamp duty in Ireland is 1% so that each and everytime a fund buys an Irish Stock there is a 1% cost taken from the fund. The Irish stock market only represents about 0.2% of the world so for everyone else on the planet this really isn't a big problem. A market weighted portfolio will only have a tiny holding in Irish Stocks (if anything at all). But in Ireland this is a massive handicap since nearly all the Irish Insurance Companies funds are stuffed full of Irish Stocks.

Who bears these additional costs? The investors in the fund of course- i.e. you! These costs only show up in the final returns the investor receives - there is no requirement in Ireland for the Insurance companies to provide audited report and accounts showing these trading costs or the turnover of the holdings in their funds, or if they profit from stock lending etc etc.

Consequently, even if you were to raise merry hell until you obtained a detailed breakdown of the annual management charges on a daily basis, you would still simply be wasting your time and money.

To my mind the issue that should be raised is to require all investment companies operating in Ireland to provide independently audited report and accounts clearly showing all the fees and expenses of a fund.

For our clients we only recommend funds where we are able to obtain a prospectus, audited accounts and daily pricing. Anything less than this and you simply have no idea what you are really paying in fees.

For a brief analysis of international studies in this complex area please see [broken link removed]

Marc

Hello Marc
Thank God someone is listening. I have been trying in my limited way to explain that New Ireland Assurance as in my case have failed to tell me what I am paying. So perhaps tenchi would like to argue this with you. I may not be the rocket scientist as he put it but you grasped what I was trying to get at. So to make myself clear I believe the amount I have had deducted is larger than the amount refered to by Tenchi (tenchi figure might be what one can expect to cough up on a yearly basis depending on the balance of your fund at that given time) if I'm wrong then defend your position happy to listen to what you have to say.

This was taken from the international studies as stated above by Marc

Conclusion
Fund managers in Ireland do not benefit from the economies of scale seen in the USA or even the UK. We estimate that the possible cost of investment for the average Irish retail investor is of the following order of magnitude:
Quoted Fund Management Charge: 1.00%pa
Additional administration and Custody charges: 0.91%pa
Hidden trading costs: 1.44%pa
Total: 3.35%pa

In my case they are deducting charges on a daily basis. If England can work these additional charges out but Ireland states is not possible then, theres something wrong and we need to change the Law in this country.

So my article wasnt wrong the only difference was that Ireland doesnt require Insurance Companies to give this information to their clients but more importantly they should be made.

Because my management cost is higher does this mean I could be paying a yearly fee of 4% on my investment. What chance do I have with these sorts of fees. Does anybody have any advice? In so far as is there any investment with reasonable return but has lower fees or are all investments the same.

Very good questions being asked here. there seems to be a further murkerness in the finance sector

My Investment return might not even achieve 4% this year and if that's the case my investment will drop with these fees being deducted. If the return is only 4% then my Investment doesnt grow. The return might be 5% then my return is no better than a savings account in a bank.

I have also asked for an update on how this Investment is doing and although I requested that about 2 weeks ago I still havent received it. When I questioned this I was told it was being sent out.

So Tenchi that's why its important to know what THESE FEES are. It could turn out that my money would earn more just sitting in a bank for the time being.

This affects everyone with an Investment and so everybody should be demanding better transparancy from the Insurance Companies, Agents and Tied Agents. It's like giving them a blank Cheque. The next time you invest ask them this question and see what they tell you "is the only charges applied the 1% and the 1.65%" and see what your told!

Is this something the financial regulator deals with? Is this a valid complaint? or is there nothing that can be done about this?

Can anybody tell me what the tax implications are for cashing out of this mutal fund.