Where to invest small lump sum and monthly additions?

My figures were obtained from Friends First's own website. As they're the product provider, I'm happy to use them.

If you still want to even shortlist a product as a "contender" for the original poster with the following charging structure, I've nothing more to add.

  • Monthly policy fee €3.75 (indexing)
  • Allocation rate 106% in years 1, 2 and 3, 104% thereafter
  • Annual management charge 2.5% for 5 years, 2% from year 6 to 16 and 1.5% from year 16 on
  • Fee to broker for setting it up
 
There would be no policy fee under our arrangement with FF.

Perhaps FF uses a different methodology on its website to ES - I was able to match your ES numbers so I am happy that my own spreadsheets (I assume you are just taking numbers from a website) are working correctly and therefore my FF number is quite correct and consistent with the ES number.

A number of funds should be considered - and those with hidden commissions avoided.
 
As I said, my figures were calculated using Friends First's own website. Either (1) you're wrong in your own calculations or (2) Friends First's own system is making a mistake when performing projections. Either one wouldn't exactly have me rushing out to invest in this product.

The removal of the policy fee doesn't affect my opinion that this is not a good product to be shortlisted for the original poster.

Of course hidden commissions should always be avoided. As I said earlier, all commissions should and indeed must be diclosed. Does this Friends First product pay over-ride commission?
 
Projections froma fund manager are just that - projections, they would usually not be a deciding factor in recommending a product to a client.

I think it is one to be considered - amongst others - the range of funds available through Friends First and the investor's specific circumstances would be the most important factors once the most suitable fund managers and products have been shortlisted.
 
South said:
Projections froma fund manager are just that - projections, they would usually not be a deciding factor in recommending a product to a client.
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They are useful when comparing the effect of changes on returns when comparing different products which use the same assumed return rate in projections/illustrations.
 
Gonk - if something is hidden a good advisor can earn his/her fee by removing them, I would never have guessed that the product LD is referring to has a commission of 10% if I was not good at finding things.

Club - of course it is useful, as I said it is not decisive.
 

The Reduction in Yield figure (the effect of all charges expressed as a reduction in annual % return, for the benefit of those outside the industry) for the Friends First product is sufficiently high for me to remove it from any short-list, as there are a sufficient number of other products out there with a wide choice of funds and lower charges.

While certain Friends First funds may well recoup the extra charge by out-performance in the future, I certainly wouldn't use this as a selling point for obvious reasons.

I suppose the answer to this will be that Friends First have a choice of funds that may be more suitable to certain clients and this justifies the extra charges. The same argument can be used to justify any high-charge savings, investment or pension product that you care to mention.

Gonk - if something is hidden a good advisor can earn his/her fee by removing them, I would never have guessed that the product LD is referring to has a commission of 10% if I was not good at finding things.
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I object to the incorrect inference that our Savings Plan product has hidden charges, by being mentioned in this, grammatically incorrect sentence.

All charges that apply to a customer's savings are detailed on our website and in five different places on our information pack. Full commission disclosure (including over-ride commission) is made twice before a customer applies and a third time afterwards. No charge or commission is hidden.
 
If I were you, in the interest of clarity, I would put the override commission on the website, so that it can be compared with a nil commission product.

The FF fund may be suitable, as I have already said the reduction in yield is not as dramatic as your figures suggest because your figures are questionable and were based on a different charging structure to the one I proposed.

Are you unable to verify the FF figures independently in the way that I have done?

My final comment on the Op's question:
Consider Eagle Star, Quinn Life, New Ireland, Friends First and Irish Life.
There may be others - the most suitable would need to be assessed by looking at the full detail of the investor's circumstances.
 
If I were you, in the interest of clarity, I would put the override commission on the website, so that it can be compared with a nil commission product.
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Thanks but I'm not about to start taking business advice on "clarity" from an anonymous poster on a website, whose suggested route to a fee-based, nil commission financial service is via a PM.

Are you unable to verify the FF figures independently in the way that I have done?
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I've already answered that question in this post. I note you never replied to the query on whether or not the Friends First product pays over-ride commission.

Now are you going to withdraw your incorrect inference that our product contains hidden commissions? If not, it will certainly give me and anyone else reading this thread an insight into your character.
 
Included in South's short-list for the Original Poster
Friends First

Allocation rate 106% in years 1, 2 and 3, 104% thereafter
Annual management charge 2.5% for 5 years, 2% from year 6 to 16 and 1.5% from year 16 on
Fee to broker for setting it up

I don't need to even make a comment here.
 
It is false advertising at best.

There is absolutely no override commission on the deal from FF.

I think you should be able to verify figures produced by ES and FF, if you cannot do so, then how can you spot weaknesses in them.

Your last post above is of no substance, as I have said too many times, every situation should be assessed on its own merits.
 
Wow, thanks for all the replies guys. I will need to have a good read over all the replies again and get back to you with more questions, but for now:

I don't think it will be a long term investment, more short to medium. Basically I'm 27 and want to start investing because:

A) I am now earning enough money so I don't spend all of it every month,
B) I will be more encouraged to save more each month if I can actively see my money growing. At the moment I'm saving about €500 p/m. However I work in sales which is largely commission based, so it's irregular. Sometimes I might not save anything but others I might be able to put away 2k or more.
C) I own an investment property but want to in the coming years buy a place of my own to live in myself so need to save for deposit and stamp duty; or
D) I will most likely start my own business one day (probably not for 5 years or so) and want to save for that.

However, who knows I might need it sooner, but I hope not.

Small charges don't scare me much, I'm looking for greatest capital appreciation (aren't we all..). I've looked at the Quinn Life Freeway ones before and that looks excellent.

I'll need to take time to research them all, but any particular pointers would be appreciated.

Thanks for your help.
 
To South - First you infer that we have hidden commissions. When I disprove that you make an accusation of false advertising. I took the first one seriously, but now you've just lost any credibility - I don't even have to reply to that one.

Face it, South - you've been proven wrong and you're just not big enough to admit it.

Keep on arguing that we engage in false advertising. Keep on arguing that the Friends First product deserves to be on a shortlist of products, with those charges. Keep on arguing.
 
Colly you will find it hard to beat Quinn Life, especially when it comes to low fees and charges and no commission payments.
 
Thanks. Looks good alright. I'm also looking to invest in China, and their fund seems to be doing very well.
 
Hi LDFerguson

Your savings deal looks interesting - is that a 0% commission product or do you take commission on it?
 
Thnx LD I will have a look at Quinn Life as well, 12.5% seems a big high.
 
Should clarify - the commission gets paid to us by Eagle Star and is already incorporated into the charging structure. The only charge you pay is 1% of the fund per year or 1.5% if you choose a Protected of Threadneedle fund, assuming you're starting your plan with a lump sum of €7,500 or more. Eagle Star pay us our 12.5% out of this - effectively they pay us up-front on the assumption that you will continue your plan for at least five years. You don't pay an additional 12.5% charge or anything like that.
 
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