Probably the best (cheapest) PRSA in the world?

I switched from Irish Life 1% AMC and limited choice to Standard Life 0.9% Vanguard in late 2023.

Comparing RLI's "RL BlackRock Developed World Equity Index Fund" to Standard Life's "Standard Life Vanguard Global Stock Index" over 5 years (longest horizon available as neither around 10+ years) then RLI has performed a lot better.

So it seems like I should be switching to RLI for their AMC of 0.55% and an index fund that can not only match Vanguard but has actually beaten it
 
Fortune said:
Bit of a different case where you're taking out a new policy every year.
Click to expand...
Not an identical case I agree. The existing customer does renew their policy which does retain its policy number though. The new customer buys the same product for less.
 

It's not really the same thing. A big part of the issue with car loans in the UK was that consumers weren't told what commission was being generated for the salesperson.

PRSA commission disclosure at or before point of sale has been mandatory for years.
 
Poseidon said:
The "price walking" new/existing customer pricing differential has been illegal in car and home insurance since 2022.
Click to expand...
The benefit of this was whittled away almost immediately by the insurers charging the same price for "New" and "Renewal" business, but also offering a promotional discount to attract the "New" business. Which is apparently entirely legal and has the same outcome.
 
Sounds almost like an AMC rebate.
 
Poseidon said:
Are they? The factsheets indicate they both track: https://www.msci.com/documents/10199/178e6643-6ae6-47b9-82be-e1fc565ededb albeit in euros.
Click to expand...
Staring at the two fund fact sheets side by side, it's hard to tell and it's also a point in time exercise while you're trying to analyse why one did better than the other over the past 5 years. There are different weights to countries and individual stocks for sure.

Worth noting in the "past performance is not a reliable guide" guise, that the 1 year performance for BR is 9.13% and for Vanguard 20.15%, and 3 year is 9.14% BR to 13% Vanguard (could also be reporting period, Vanguard is dated 28 Feb and the info on BR page is 18 March and, uh, stuff has been happening in the markets.)
 
C_Pike said:
Staring at the two fund fact sheets side by side, it's hard to tell
Click to expand...
Why?
Unless the "Net EUR" is significant then these seem to attempt to track the same index?
C_Pike said:
and it's also a point in time exercise while you're trying to analyse why one did better than the other over the past 5 years. There are different weights to countries and individual stocks for sure.
Click to expand...
I agree that a somewhat pointless past performance comparison. The only logic to it might be to compare the effect of charges on each.
 
ClubMan said:
Unless the "Net EUR" is significant then these seem to attempt to track the same index?
Click to expand...
Right - I mean "hard to tell why the difference" - must be changing weights at different times cumulatively building up a range in performance between the two. BR won over 5 years, VG has won over 3. Over 20 or 30 I'd say you'd be gambling to try and guess which would end up better off on pure performance. As you say, the thing you know for certain is the fees.
 
C_Pike said:
Right - I mean "hard to tell why the difference" - must be changing weights at different times cumulatively building up a range in performance between the two.
Click to expand...
Ah, I see. That's something that puzzles me - index trackers are supposed to be passive but is there an element of active management in the rebalancing? Or is it all done automatically without any subjectivity according to some rules/formulas created by each provider? But then isn't the creation of such rules/formulas akin to a form of (meta?) active management....?
 
It's explained in the documentation you'll see with these funds. There isn't really a truly automatic way to do this - say, magically rebalance the amount of Apple you hold as its weight in the index moves based on relative movements. So they pick dates to do it. In theory if both funds started the exact same time of the exact same day and bought all their assets at the exact same price, you would see variability come in over time. One fund rebalances itself weekly, the other biweekly. Or they do it weekly but one does it on a Monday morning and the other on a Wednesday afternoon. You're now out of sync with one another. These decisions don't really count as "active management" in the sense of trying to beat the market, they're just managing in the sense of the mechanics of making an index work.

Look at the amount of high frequency data driven trading houses that make significant profits out of playing the small differences in markets, before usually ending each trading day with no money in the market. These timing and trading strategy impacts do lead to price differences that creep in in a range. I'd bet over a long period (20-30 years) two index funds would roughly even out.

To quote from the Vanguard fact sheet for world indexed equity (my emphasis):
The Fund attempts to Track the performance of the Index by investing in all constituent securities of the Index in the same proportion as the Index. Where not practicable to fully replicate, the Fund will use a sampling process.
Click to expand...
 
To one of the original questions - "I wonder why this game-changer has received so little attention"

Seems to me that their business strategy is low cost, high volume. Meaning their margins probably don't justify a big advertising/PR spend, and instead they hope to rely on organic/word of mounth growth, which is a slow process. The "profit share" thing is likely designed not only to attract new clients, but also get them more referrals. Give them a few years of compound growth though, and I think they could take a big slice of the market.
 
I'm currently with Zurich with a PRSA and Retirement bond. Both set up execution only. 1% amc on prsa. Bond has 0.75% amc. Value of both is currently €230k. (Post Trump reduction). Funds are 5*5 Global for prsa and BlackRock Indexed global equity for the bond.
I am not contributing any more and recently retired 66 next month.
I feel I would benefit from moving to the RL prsa product or even arf product over my retirement years.
Could you guys give me your view on it?
(I was previously with Equitable life and that didn't end well....)
Any help or guidance would be greatly appreciated.
 
Milkman said:
Could you guys give me your view on it?
Click to expand...
Well, the charges will be lower, you'll benefit from the discretionary ValueShare bonus, and you'll have a similar choice of investment options if you switch to Royal London. Not sure how Equitable Life and their with profits investment approach is relevant here.
 
Thanks Clubman, it seems a logical choice to move it over to Royal London. I only mentioned Equitable as they were also a mutual company but got it badly wrong. Maybe Royal London are different and the rules are tighter now anyway I believe. Thanks again for your help.
 
You must log in or register to reply here.
Menu
Log in
Register