Seeking Advice on AVCs: Cornmarket vs. Fairstone

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PiggyBankPirate

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Hi everyone,
I’m 26 years old, living at home, and currently working for the HSE with a salary of €66K. I’m extremely new to all of this—investing, pensions, AVCs—so I’m looking for some guidance to help me make the right choice.
I've been looking into setting up an Additional Voluntary Contribution (AVC) to boost my pension savings, but I'm a bit confused about the best option given the fees and charges involved.

Here’s what I’ve found so far:​

  1. Cornmarket:
    • Annual Management Charge (AMC): 1.00% for Public Sector Strategy Funds.
    • Tiered AMC: Reduces by 0.25% on amounts between €40K and €140K, and by a further 0.25% on amounts above €140K.
    • Setup Fee: €595, deducted from contributions in the first year.
    • Contribution Charges: 0% on regular contributions, 4% on single premium contributions.
    • Payroll Deductions: Contributions can be made directly via payroll, which provides immediate tax relief.
  2. Fairstone (AskPaul):
    • AMC: 1.50% flat rate.
    • No Setup or Contribution Charges: No initial setup fee or contribution charges.
    • 100% Allocation: No charges on contributions, meaning all of your money is invested.

My Questions:​

  • Given that I'm relatively young and have time on my side, which option might be the best for long-term growth?
  • How significant is the difference between a 1.00% AMC (Cornmarket) and a 1.50% AMC (Fairstone) over a 30+ year period?
  • Is the convenience of Cornmarket's payroll deduction and immediate tax relief worth the setup fee and other charges, or would Fairstone's simplicity and lack of extra charges be better in the long run?
  • I've read that some people recommend an execution-only AVC, but I feel this might not suit my circumstances. I’m extremely new to investing, pensions, etc., so I’d prefer a bit more guidance and support.
  • Are there other companies or providers you would recommend instead of these two?
Any insights or experiences with these providers would be greatly appreciated. I'm trying to make a smart decision now to set myself up for a comfortable retirement, so any advice you can share would be really helpful!
Thanks in advance for your help!
 
My initial response would be why a 26 year old (living at home) wants to invest AVCs? You are presumably a member of the newer Single Pension Scheme and will likely complete 40 years service by the time you retire (assuming you stay in the HSE?).
I would focus on a mortgage for the next 15/20 years before even considering AVCs. There are limits to how much you can invest in AVCs particularly if you are likely to have 40 years service by retirement. You can revisit the AVC issue in your mid-40’s when you might have a better handle on your estimated pension benefits.
 
If you take a simple unchanging sum of 10000 euro.
1% AMC is 100 euro per year. 3000 euro over 30 years.
1.5% AMC is 150 euro per year. 4500 euro over 30 years.

When your actual AVCs increase upwards in value over the 30 years the 0.5% extra AMC will multiply to a very large amount of extra charges.

The Cornmarket deal would probably be your best bet over a reasonably long term.

In the future when you gain more experience you could consider opening an execution only AVC PRSA to operate anongside your Cornmarket AVC. This would be particularly usefull if you decide to make future single premium contributions.
 
Conan said:
My initial response would be why a 26 year old (living at home) wants to invest AVCs? You are presumably a member of the newer Single Pension Scheme and will likely complete 40 years service by the time you retire (assuming you stay in the HSE?).
I would focus on a mortgage for the next 15/20 years before even considering AVCs. There are limits to how much you can invest in AVCs particularly if you are likely to have 40 years service by retirement. You can revisit the AVC issue in your mid-40’s when you might have a better handle on your estimated pension benefits.
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Probably should look at doing a bit of both.

Set a target for the rough house price and how much deposit/solicitors/etc is needed within a defined timeframe.

For the pension, as you know yourself, pension contribution tax relief allowance is use it or lose it type. Also need to consider time in market and the compounding effect, so the earlier the better. Practically speaking, pension is more or less the only game in town in Ireland.

The below is worth a read.

https://www.askaboutmoney.com/threads/pensions-vs-other-forms-of-investment.236865/
 
Cornmarket is a one off up front set up cost. Fairstone is a 40 year compounding charge.

It is simple maths. If you invested in the same fund returning 6% gross, €150 a month for 40 years. Cornmarket charges 1%, Fairstone charges 1.5%. In 40 years, your Cornmarket pot is €228,903, the Fairstone one is €201,172, €27,731 difference.

Add in the Cornmarket one will do salary deduction so you get tax relief at source and any changes are done through payroll, it is less hassle.
 
The Cornmarket product is an AVC (no disclosure requirements).

The Fairstone one is an AVC PRSA (disclosure requirements).

The average AVC maturing at the moment is less than €100,000.

The 'difficulty' of non-payroll deduction is a myth put forth by those selling you a (generally) more expensive product.

The AMC is the 'headliner' and the tiered AMC on the AVC is a carrot. But, no account is taken of the Other Ongoing Costs or Portfolio Transaction Costs on the fund/s and the differences in these could negate some/all of the savings via AMC. The policy fees & charges flier for the Cornmarket product states that the OOCs are between 0.10% and 0.20% for the stated funds - that's high. You simply cannot compare these two products easily. Maybe someone that's proficient with all the variables ie initial €595 charge, initial AMC, tiered AMC and fund OOCs might be able to do it on excel. Even when you get to that stage, we'll have left out the comparable PTCs because the only way we have of viewing those is via the fund price/past performance drag of the fund.

I've never seen policy conditions document for the Cornmarket product. If someone has one and wants to send it to me I wouldn't mind having a look at it. Better still, if you've bought the Cornmarket product and would be willing to give me a letter of authority to dig a bit deeper on the actual OOCs and PTCs for the product with ILAC (on your behalf), I'd be willing to do that.

But, in your case, with a potential 40 years service, I'd be focused on some other aspect of a financial plan at this time.


Gerard

www.prsa.ie
 
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Thank you all so much for your advice—I'm really grateful for the insights. I recently had a meeting with a financial advisor from Ask Paul, which I found really helpful, but I'm keen to consider all my options carefully before making any big decisions with my money.

The reason I was focused on AVCs, specifically looking at the Cornmarket and Fairstone options, is that I was advised the HSE pension might not be sufficient on its own and would likely need an additional top-up. However, after hearing your thoughts on the costs and complexities involved—like the tiered AMC, Other Ongoing Costs, and Portfolio Transaction Costs—it seems that these might not be the most straightforward or cost-effective options. I’m starting to think that getting on the property ladder might be a better priority for now.

In the meantime, I've opened a savings account with Trade Republic to start earning a bit of interest while I plan my next steps. Also, if anyone has recommendations for financial advisors, I'd love to hear them. I'm based in Cork, but I'm open to virtual options as well. Any suggestions would be much appreciated!

Thanks again for all the support—it's really helped me think things through.
 
The situation with the cornmarket AMC isn’t as simple. My understanding is that the tiered AMC applies to the base rate of all available Irish life funds. So the world equity index fund on the Forsa AVC scheme is 0.65% AMC and the first .25% reduction and second .25% reduction would apply to that, leaving total of 0.15% AMC on values over 140,000.

Agree with aiming to buy a house first before investing in AVCs as public servant.
 
Gordon Gekko said:
Why not avoid both of these and use an execution only solution via Zurich?

Personally, I’d run a mile from either Cornmarket or AskPaul.
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I am in a similar position to PiggyBankPirate. Which of the Zurich funds would you recommend for execution only? I have 30 plus years until retirement.
 

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kevinb said:
I am in a similar position to PiggyBankPirate. Which of the Zurich funds would you recommend for execution only? I have 30 plus years until retirement.
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Your time horizon suggests equities. Assuming that behaviourally you won’t panic and cash-in when volatility kicks-in, the International Equity fund.
 
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