What level of fees are reasonable on pension products

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Blackrock1

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I have recently moved jobs and i have various pension products kicking around, ideally id like to consolidate them or at least have a central view of them.

There are 2 with Davy, PRB (1% annual mgt fee) and a PRSA (0.75% fee), one PRSA with Irish life and a new PRSA with Zurich.

The benefits provider in my new role has undertaken a review of all of them and given some advice on what i might do to consolidate them (or at least some of them) and increase the risk profile in line with my appetite, however in all cases the annual fees are higher, the PRB proposed is at 1.2% and the PRSA proposed is at 1.06% (so effectively both new products are circa 0.25% higher than my existing ones)

I havent gone through in detail yet but assume some element of the fee is to the benefits provider to take over mangement of the disparate funds, so what i am asking is is that level of charge reasonable or not?

Thanks
 
In my opinion the starting point should be 0% on contributions and < 1% annual management charge. But you should look at the stated reduction in yield for each to get a better idea of the impact of charges on performance.

I presume that the benefits provider is a tied agent and not an independent financial advisor? If so you should be very careful of taking their advice particularly if it means consolidating some or all of your pensions into one with higher charges. That sounds to me like terrible advice.

You should probably get independent advice. Note also that having your retirement investments fragmented into different pensions can actually be advantageous as it may offer flexibility that having a single consolidated pension does not. E.g. accessing different pensions at different times and "early" rather than only having one shot at it. (I'm assuming that all pensions have competitive charges).

You don't say what age you are but unless you are very close to retirement you should at least consider having your pension investments in equity heavy funds for the possibility of best growth over time. Even if you are close to retirement and likely to live on for 30+ years you might want to consider equities. But you should get independent advice on what best suits your specific needs. Often index tracking funds have lower charges and may have a lower reduction in yield than actively managed funds.

Disclaimer: I am not a professional financial/pensions advisor.
 
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Well the PRB's seem high at 1% or over. I don't know the value but was recently able to get 50bps AMC with Zurich when I moved a PRB for approx 400k.

As Clubman says. I wouldn't rush to consolidate all your pensions without thinking about it. There are advantages to keeping them separate depending on your circumstances. I had a couple already with Zurich so moved my other PRB to them but didn't consolidate them. I can see them all in one place though
 
Why would you move for a higher cost to you? Who does this benefit, the advisor/ provider or you?

For PRSA's over €100k, the cheapest you can get is 0.65% for some index funds, so you are not far off it. You can get cheaper for the PRB's depending on what you are looking for and how you want to pay for it.

As others have pointed out, amalgamating them all isn't necessarily the best thing to do as once they go into your new scheme, they are part of the scheme and the ability to access early is gone.

Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Thanks all, the advisors are recommended products from different providers so not sure if they are tied or independent and i take the point about the different pensions and ability to access at different times, but the PRB will always be seperate and as things stand i have 3 seperate PRSA's so wont consolidate them all.
 
Whether they're tied agents or not, if they're recommending that you consolidate/switch to a product with higher charges then you should really look elsewhere for more prudent suggestions as, on the face of it, that's terrible advice.
 
Thanks. Not sure that you really want a heart rate of 3000 bpm though?
 
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