Pension Products & Execution Only

[GSheehy]

Had a look at the offerings of some other pension providers to see if there were any ARFs, PRBs or PRSAs that might have a pricing structure that was relatively competitive on an execution only basis, for certain contribution levels on passive funds.

This is what I could find.

It's not extensive but it might help with the frequent requests on here for 'comparative' pricing across the market. The Zurich Life products are on the www.prsa.ie website. It's also impossible to put an AMC price on €100K, €500K or €1m, so start a conversation with whatever person you choose to do business with and lay out your stall on what exactly you're looking for. There are no SDIO product options on this website.

The market is changing all the time. It'd be pointless requesting information now for an ARF that you're thinking of buying in 5 years time. It may well be that Vested PRSA's play a greater role in a few years time or that the pricing will change again. This execution only model may be under threat in a few years time. Had some email exchanges with Financial Services, Financial Stability and Capital Markets Union on where they might be going with this and wasn't too impressed. I think that if they're still messing around with PRIIPs seven years on from inception then there's a good chance that they'll not get this right.

Deliberately included ARF/PRB products that do not have early exit charges so that buyers could move if they found something more competitive. There's comfort in that for some folk. That's not to say you can't request specific pricing on a provider/product/fund that has early exit charges as sometimes it can be cheaper, but you're locked in for a few years. The users of prsa.ie will already know this.

Research on the Other Ongoing Costs can be done via the product provider websites/fund factsheets, before you might use the website. There's a tendency to make contact for an execution only service (because you like the AMC price) but to have absolutely no research done at all on the provider, product or fund/s. The vast majority of that research information is readily available on provider websites.


Gerard.

 

[Flybytheseat]

Thanks Gerard. Excellent website and the most transparent I've seen to date. Wishing you every success with your execution only business.

 

[Markel]

That’s great Gerard, and glad to see you’ve some more providers on offer. What is your sense of when execution only might be regulate out of existence?

I’ve a PRB with yourself but would consider moving it again and paying a small early exit if execution only was going to disappear

 

[GSheehy]

EO is not going to be regulated out of existence.

What they're proposing is a ban on the product provider paying the intermediary for non-advised services.

So, you either adapt to a fee only model or adapt the current model.

This option would be accompanied by an appropriate transitional period,to allow distributors and manufacturers time to adjust their business models from a commission-basedto a fee-based model, and a grandfathering clause to ensure that obligations under existing contractswith retail investor would not be affected.

I'd say that the various trading platforms might be the main target for this but all non-advised services are swept up in it. Maybe there's something going in those outlets that they see as detrimental to consumers, in terms of transparency, but I know nothing of that sector.

In summary, the EU are of the opinion that the EO model i) is not competitive and doesn't provide value for money ii) that products can be bought at a lower cost elsewhere in the market iii) is misleading iv) has a conflict of interest and v) is not transparent. It wont be a shock to you that I'd disagee.