Zurich v Wealth management company

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Hourglass

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My husband and I are looking for some help and advice. We are both retired and have a lump sum of 200k that we want to invest. The Morgage is paid, we have no debts and we have some emergency funds outside of this lump sum and we have our monthly pensions. We have no experience whatsoever of investing and ideally want to put the money somewhere we can get access to at short notice if needed without penalty ; where it makes a reasonable return and we don’t have to worry about managing it on a day to day. We understand the need to invest for a longer rather than shorter period ie 7-10 years.
We’re not huge risk takers. With my husband scoring a level 4 and me a level 3-on one of the Zurich risk assessment tool.
We were considering investing either with Zurich or through a financial wealth management company recommended by a colleague. But to be honest we’re a bit confused and overwhelmed about it all. It seems like the fees for a wealth management company are higher than just going direct to Zurich as they first take a fee and then whoever they invest our money with takes a fee, so I’m not sure the vale of a wealth management compan but We’d be happy to pay the higher fees if it was worth it. We would be most grateful for any direction, advice or help or other suggestions re what to do with our lump sum and thank you for taking the time to read this .
 
Keep it simple, avoid worrying about possible dodgey wealth firms and go with Zurich, just focus on getting lowest possible fees.There is another live thread on this site ATM where life savings have been lost and one of the questions being asked is why did they invest there. Probably recommended by a colleague I guess.
 
Zurich is fine but their fees add up and you're limited to their products. A decent financial advisor would be worth it if they're working in your best interests and don't just flog you expensive products... but it's not that easy to be able to tell a good one from a bad one if you don't have much experience, so I can't argue too much with @JoeRoberts advice unless your willing and able to put in some work to vet the advice and maybe look around for other options.

Do watch those fees like a hawk - even 0.25% is €500 a year of your money. Sounds like you should avoid anything with surrender penalties too. If you let us know what the proposed charges and allocations are then you'll get a sense here whether they are good or not.
 
At the risk of being boringly repetitive, I think that this sort of question can only be addressed properly in the context of a Money Makeover.

Key Post - Basic information required for the "Money Makeover" forum

It can be difficult, but please try to use a meaningful title in your thread For example "27 year old with mortgage arrears". You will get a much better and much more coherent answer if you give as much information as possible in your first post. For example, if you give your mortgage rate, it...
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There could be some key information missing that would influence any feedback.

Also to be boringly repetitive in relation to choosing where to invest money. (I'm not saying that direct equity investment is necessarily the most appropriate option here but it may be an option to consider).

What to do with a million euros?

Personal details Your age: 49 Your spouse's age: 54 Number and age of children: 2 aged 9 and 14 Income and expenditure Annual gross income from employment or profession: €30,000 (state job) Annual gross income of spouse/partner: €60000 (state job) Pension: have maxed AVC’s (should I also...
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Thank you Joe and Shannb1 for your prompt replies.
The fees outlined are as follows:
1. The financial wealth management advisory company will charge us an annual management fee of 1% and then they invest the money, with Irish Life who will charge us another fee ranging from 0.55% to 0.8 %. There is no penalty for early withdrawal.

2 . Zurich outline an annual management fee of 0.85% and there may be a 1% additional charge if we invest in external funds . Furthermore if we select funds from some of their other top-class management funds. eg Blackrock) there would be further charges that vary depending on the fund. (But we are only looking at their base level funds not these ones.) They have recommend an Easy Access fund in particular one called “Auto invest “and suggest that we drip feed the money each month into the investment account rather than investing all of it at the start. (Not fully sure if that’s a good option or not? ) There also is no penalty for early withdrawal. They are suggesting a “60% level 4 medium risk fund and 40% in a level 3 risk fund and as a combined selection would be considered a level 4 selection.”
Thank you again and look forward to hearing your views.
 

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Fortune said:
Why do you say that?
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Just from the original post:
Hourglass said:
ideally want to put the money somewhere we can get access to at short notice if needed without penalty
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obviously you don't want to be taking it out for no reason and its better to be planning to leave it in for the long term, but in case of emergencies it's frustrating to have to pay a penalty to get your money (unless they are giving you extra allocation or lower AMC in return)
 
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Hourglass said:
The financial wealth management advisory company will charge us an annual management fee of 1% and then they invest the money, with Irish Life who will charge us another fee ranging from 0.55% to 0.8 %. There is no penalty for early withdrawal
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Fairly high total annual fees - above 1.5% is steep unless the value provided justifies it. You’re effectively paying for two layers of management: the advisor and the fund manager. To be frank, assuming you've met them then it doesn't sound like they have convinced you of the value they are adding - if they did you shouldn't be feeling confused and overwhelmed.
Hourglass said:
Zurich outline an annual management fee of 0.85%
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This doesn't sound too bad - maybe others could give a view on how this sits these days for a 200k fund. It's definitely more cost-efficient, assuming you stick to their core funds. Are you getting 101% allocation to cover the government levy as well?
Hourglass said:
and suggest that we drip feed the money each month into the investment account rather than investing all of it at the start
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Drip feeding ("euro-cost averaging") is often recommended to reduce the psychological risk of investing everything just before a market drop. It’s especially useful when markets are volatile or near all-time highs. However, statistically, investing a lump sum immediately usually wins in the long run - because markets tend to rise more than they fall, so being “in the market” earlier benefits from compounding returns. A balanced approach could be to invest some (half?) now and drip the rest over, say, the next 6-12 months, but that depends on your own psychology and what you would be comfortable with - how often are you going to be checking the investment, would you be temped to sell at a bad time after a market downturn etc. etc

I don't really have a view on the specific fund mix they have recommended - the Prisma funds are decent I think and on the face of it it's relatively low on the risk spectrum for a 7-10 year investment but as @ClubMan says there could be extra context needed here e.g. around your risk capacity (your financial ability to endure potential losses without significantly impacting your financial goals or standard of living). It kind of depends on what you might want to do with the money as well, things like planning to pass on gifts/inheritances and estate planning might come in to it depending on your circumstances. Maybe the money makeover would be a good option!
 
Hi Clubman Thank you for your suggestion re doing a money makeover. Hopefully below think below is the information related to same.

We are in our sixties , no kids. We have no mortgage or any debts. We have 70 k in the AIB bank (emergency money); 100k in prize bonds - lodged there a year ago as didn’t know where to put it ; we won € 600 in the year so these returns are not great so we probably need to move these funds elsewhere-. We have no car loans or any loans what so ever and credit cards when used are paid in full each month. We both have defined benefit monthly pensions, which we can comfortably live on and we have our wills made with our solicitor and everything is in joint names.
 
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