Standard Life - Direct PRSA

I was hoping to set up a PRSA invested into 2 or 3 Vanguard funds. I was just wondering what fees am I likely to incur if I go direct to Standard Life as a personal customer ? Would I get better rates through a broker? Grateful if anyone has an experience with them.

What age are you and is the contribution €10pm or €10,000pm?

Is it a salary deduction or individual (own bank account) PRSA?

In2West said:

invested into 2 or 3 Vanguard funds

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Just be careful of unnecessarily splitting contributions across funds when there may be only slightly different asset diversification and risk/reward profiling between some funds.

Mid 30s, contributing about €600 a month via salary deduction. Thanks for info regarding splitting fees! I had intended going down the Zurich route and just putting it into Global Equities but when I was researching it there seemed to be a lot of positive feedback on the vanguard funds.

A lot of the positive feedback about Vanguard is US-based and whilst perfectly valid, they're ultimately passive funds and are therefore easily replicated in other non-Vanguard products. Zurich, for example, offer "Indexed Global Equity (BlackRock)" which is a very similar product. Ultimately, you just need to look for the words "passive" or "indexed" and make sure the expense ratio is cheap (ideally should be in and around 0.1%- 0.2%).

After that, you're choosing between vendors (i.e. the Zurich's or Standard Life's) based on their relative AMC's, which are higher and therefore more impactful than the fund expense ratios. These can be 0.75% to 1.5% or so. Finally, make sure to compare allocation also - ideally 100% or more.

In2West said:

Thanks for info regarding splitting fees!

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My point wasn't about fees but about splitting between funds in an attempt to diversify when it might not really be necessary or might even throttle returns over the long term. In my opinion there's a strong argument to keep things simple, just choose the highest equity content fund/index tracker, stick the money in, and forget about it.

In2West said:

I had intended going down the Zurich route and just putting it into Global Equities but when I was researching it there seemed to be a lot of positive feedback on the vanguard funds.

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Because no one bothered to analyse the funds side-by-side?

conor_mc said:

Zurich, for example, offer "Indexed Global Equity (BlackRock)" which is a very similar product.

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Not on their PRSA (yet) but likely to be on Non-Standard as some stage.

conor_mc said:

ideally 100% or more.

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I don't know anyone selling PRSA contracts with more than 100% allocation.

I think it's 0.90% + circa 0.02% for that level of contribution with SLAC Direct. No t aware of a broker doing it for the same as that.

Does your employer have a Letter of Appointment with SLAC already i.e. appointing SLAC as a PRSA provider to the company.? Have you free hand at choosing what PRSA provider you want employer to do salary deduction for?

Thanks GS, that’s exactly what I was trying to determine was there any saving to be made going through a broker versus going direct with SL. Should be ok to go with either option so I’ll take a look through the different funds now.

I thought that it was often cheaper to go via a broker (in particular an execution only one where applicable) presumably on the basis that the pension provider company prefers to let brokers do most of the legwork in terms of selling, advising (where applicable), and other interaction with the customer?

SLAC are different. They choose to offer a few products on a direct execution only basis. How that makes economic sense to them from St. Stephen's Green I do not know but there are people who will just not deal with intermediaries. Others like to have an intermediary and build a good relationship with them ( yes, even on an execution only basis). In this thread the OP is basically betting that Vanguard will outperform Blackrock by circa 0.20% pa (i.e. what he/she could buy), such is the result of the online positive feedback on VG. Maybe SLAC are just struggling with where they fit in the Irish market. If Vanguard wasn't on the platform I'd say the market share would be much smaller. They now have the quandry of whether to go into the Master Trust Executive Pension market as they just have the Non_Standard PRSA offering. I tried to work with them on execution only offerings over the years but didn't get the feeling that they were working with me. That said, one of the best account managers (the person us intermediaries run to if there's an issue or a technical question) I ever had worked with them.

They now have the quandry of whether to go into the Master Trust Executive Pension market as they just have the Non_Standard PRSA offering.

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Not from what I can see. They were certainly in that position when EPP's were shut down the freeing up of funding rules for PRSAs ended that debate. I am not hearing anything that they are looking for a Master Trust structure now that PRSA contributions are restricted to one times salary. The large lump sums that were being made previously tended to be once off payments and not a constant thing and it really does not impact on most people. So Standard Life have to assess whether the cost of building a master trust structure, which will cost a few million, will generate enough new business to justify the cost.

I went direct with Standard Life on their PRSA O product recently. The thing that drew me in is that they are offering a 0.5% rebate on fees if your PRSA holds >€100,000 in assets. So I am invested in a Vanguard product with a list price of 0.9% and effectively paying 0.4% for it. I had been with an Irish Life company plan for a prior employment, priced at 1% for an indexed fund following the same market. So I'm very happy with the change!

Their web interface / portal isn't as good as Irish Life's, has been my only complaint so far!