This week a client contacted us for review of his pension . He is aged 33 of age and currently paying 300pm into a pension with a likely retirement age of 68yrs. My first task was to research his case whereby I found the following issues, firstly his pension was not being reviewed on a regular basis by the current pension provider. The second problem I found was that his money was not invested in a way that was complimentary to his attitude to risk and he was completely unaware that he was exposed to very high risk funds. His allocation rate was 5% meaning he was being charged this every time he paid 300 euro. Lastly the annual management charge (AMC) was 1.65% of the total fund which is very high for a passively managed fund.
We communicated all the above information to our client who was then empowered to make decisions based on this research data. The client was delighted that he felt fully informed on his current pension status and was eager to hear our recommendations. The following three recommendations were discussed
1) Change funds to one that matched his attitude to risk and found the best in market (should give peace of mind and a more steady growth),
2) Had a 100% allocation rate (saving of €15pm over next 35years on current 300pm premium)
3) Reduced AMC to 1.15% which is a saving of 0.5% of the total pension fund each and every year
The changes in allocation rate and AMC alone meant that client would be €53,344 better off at retirement all other things being equal.
The client was happy and relieved to know this and left the office feeling more in control of his financial future, if you would like a review we are more than happy to talk to you. Southeast Financial Services is regulated by the Central Bank of Ireland.