How to work out charges?

jem16

bigfreddiel wrote: »

Now this was the point you missed, these finance bods will hide behind obtuse definitions so when you ask about fees they will say there are none - great you say - then you find you've been stung for a fee - now thats because you never asked about fees as well.

so thats just one are of confusion

Certainly is.

Makes about as much sense as all the rest of your posts recently.

foofi22

Thanks for the input, they have replied with a sheet detailing funds and their charges.

It mentions 3 separate charges:

Fund Based Charge - "...used to meet Zurich's expenses in managing the plan...could change in the future"

Fund Expenses - "...additional expenses in day to day management" (expenses, taxes, duties etc)

Annual Management Charge - "...taken by the fund manager"

Taking the specific fund mentioned earlier in the thread (UK Smaller Companies ZP
http://factsheets.financialexpress.n...1_ZL61_ZUR.pdf) the charges for this are:

0.48% (Fund based charge), 0.17% (Fund expenses), 0% (AMC) so total being 0.65% - does this seem sensible?

Thanks

bigfreddiel

jem16 wrote: »

Certainly is.

Makes about as much sense as all the rest of your posts recently.

well they make more sense of some of the other posts

thanks for your praise

fj

doughnutmachine

foofi22 wrote: »

Thanks for the input, they have replied with a sheet detailing funds and their charges.

It mentions 3 separate charges:

Fund Based Charge - "...used to meet Zurich's expenses in managing the plan...could change in the future"

Fund Expenses - "...additional expenses in day to day management" (expenses, taxes, duties etc)

Annual Management Charge - "...taken by the fund manager"

Taking the specific fund mentioned earlier in the thread (UK Smaller Companies ZP
http://factsheets.financialexpress.n...1_ZL61_ZUR.pdf) the charges for this are:

0.48% (Fund based charge), 0.17% (Fund expenses), 0% (AMC) so total being 0.65% - does this seem sensible?

Thanks

the AMC for a managed fund is typically 1.5% (google it for yourself if you like). that would bring the total charges up to over 2%....

I personally would not invest in a financial product if I never knew the total fees I would pay. that's why I have never bought a UT.

over the last century the UK stockmarket has delivered a 5% real annual return. you really think it sensible to pay 2% a year in fees? that's nearly half of your likely returns.

dunstonh

The typical TER on a pension managed fund is 1%. Despite a really poor 10 year period, most basic managed funds have exceeded 5% pa. after charges.

doughnutmachine

dunstonh wrote: »

The typical TER on a pension managed fund is 1%. Despite a really poor 10 year period, most basic managed funds have exceeded 5% pa. after charges.

so what are the total charges for this fund then? you indicated it was 0.16% previously?

in all honesty it's no wonder the financial industry have a reputation for being dishonest when no one seems to be able to find out the total charges for a fund.

*sigh* I bet you used to sell endowment mortgages?

dunstonh

so what are the total charges for this fund then? you indicated it was 0.16% previously?

I did not indicate any such thing. Repeating misinformation doesn't make you any more right.

I have no access to the plan details that the OP has. If I did, then I could ascertain the charges.

in all honesty it's no wonder the financial industry have a reputation for being dishonest when no one seems to be able to find out the total charges for a fund.

You are asking people to guess what the charge is without having any of the documentation available and when we cant give a charge you criticise it for being dishonest.

*sigh* I bet you used to sell endowment mortgages?

Is that the best you can do? People wont take you seriously when you post lies and insults. You are just becoming the pension forum joke.

bigadaj

Dunstonh, your advice is normally very good but you do occasionally overly promote your trade against teh admittedly often laughable and inaccurate anti ifa brigade on these forums.

Biting on the endowment accusation just seems to reinforce the history of mis selling promoted by accusations that many older fas were part of, admittedly often before they were IFAs.

Do you think it unreasonable that someone can't easily get the charges on their investments ina concise and clear way, or do you think that an ifa is needed by all to act as e client representative with associated increased cost, that's a genuine question not a pop, honestly.

dunstonh

Biting on the endowment accusation just seems to reinforce the history of mis selling promoted by accusations that many older fas were part of, admittedly often before they were IFAs.

Remember that the media was pro endowment. The consumers association had endowment best buys. Had this site existed back then it too would have a best buy endowment section. Things changed and we can look back now and see faults but at the time, people didnt see it. I think the biggest problem with endowments was complacency. They had never failed to hit target. They were cheaper than repayment mortgages. The more a risk is taken where the risk event does not occur, the less the risk is considered a risk. That, in my opinion, was the biggest issue with endowments.

Do you think it unreasonable that someone can't easily get the charges on their investments ina concise and clear way, or do you think that an ifa is needed by all to act as e client representative with associated increased cost, that's a genuine question not a pop, honestly.

I think they should be able to and in most cases they can. However, you can get mono charged contracts and multi-charged contracts. Mono charge have just one charge. The annual management charge and everyone and everything is paid out of that. Stakeholder is a good example of that. Multi-charge can see multiple charges. A SIPP would be a good example of that but also most modern personal pensions are as well.

So, whilst mono charge is easy as there is just one charge on an annual basis, multi charge contracts, which can take a bit more working out, are usually the cheapest option (looking at modern pension).

Some mono charge contracts have the charge on the product and not the fund(and sell units to pay the charge. Some have the charges on the fund and the contract has no charges. Multi-charge tends to have a charge on the contract and a charge on the fund

Zurich pensions tend to be multi-charge with charges on the contract as well as on the fund (or older ex Allied Dunbar ones using Capital and Accumulation units). You need to look at both layers to get total cost. Just as I said back on post #2.

As for whether I think an IFA is needed by all the answer to that is no and I am sure I have made that clear many times. If someone is capable of doing their own research and analysis and knows what they are doing then they should be fine with DIY. However, if someone is not up to it or does not want to do it then they should use an IFA. It is no different to any other walk of life. Do you do your own car service, your own decorating, your own plumbing, accounts etc. The choice is with the individual. If you DIY and do it well, you can save money. If you DIY and do it badly it can end up costing you a lot more than if you used a professional.

How many times have we seen people post on here that they have the Virgin stakeholder. Probably thinking they got a good deal as they went direct. Yet, had they seen an IFA, they would have saved tens or even hundreds of thousands of pounds over the term of the pension. That sort of person should be encouraged to see an IFA for their own sake. Whereas someone with a SIPP who likes trading themselves wont see any benefit with an IFA (on that front).

doughnutmachine

dunstonh wrote: »

TER has gone.

dunstonh wrote: »

The typical TER on a pension managed fund is 1%. Despite a really poor 10 year period, most basic managed funds have exceeded 5% pa. after charges.

As an investor I want to know the costs of any financial product I invest in. I just find it amazing that an IFA can not find out the likely costs that a particular investment will have. How can you recommend one smaller company UT over another if you do not know how much they both charge?

I personally think your posts on this thread have been misleading. You clearly said that there was three versions of this fund and the most expensive version cost 0.16%. Then you said typical TER was 1%, then you indicate there is no way of you finding the cost of this fund. You also said "TER was gone", then you give a typical TER?

It hardly makes me want to contact an IFA