Acorn Life Pension Tracker Fund

Stupendous

Hi,

I have a small pension 25k or so, and decreasing with the recession. An Acorn rep met me last week and is offering me to put my savings into a 'Secure Acorn Pension Fund". I understand this a pension tracker.

I know very little about this stuf (but learning fast), as my recently estranged wife used to handle this side of things, so I am not sure if I should take this offer, or leave my pension as is.

The pension tracker is a 7 year term.

Has anyone knowledge of these funds? Thanks for any help and advice!

danbohan

Stupendous wrote: »

Hi,

I have a small pension 25k or so, and decreasing with the recession. An Acorn rep met me last week and is offering me to put my savings into a 'Secure Acorn Pension Fund". I understand this a pension tracker.

I know very little about this stuf (but learning fast), as my recently estranged wife used to handle this side of things, so I am not sure if I should take this offer, or leave my pension as is.

The pension tracker is a 7 year term.

Has anyone knowledge of these funds? Thanks for any help and advice!

do yourself a really big favor and get independent financial advice and stay well well clear of acorn life unless you like paying some of the highest charges in Ireland

Stupendous

Perhaps I should have said. My pension is already with Acorn Life, so it's too late to worry about high charges. Or is it?

answerthat

its not to late, you can move you pension where you like.

coylemj

The only motivation a sales rep. has is to make commission, he will probably get a kickback from the fund administrators if you move and you will lose roughly 5% of the value of your fund because of the bid/offer spread.

A fund with 'secure' in the name sounds like a boring cash and gilts based fund. Unless you are very close to retirement you need to be in managed funds with a high exposure to equities i.e. stocks and shares. The last thing you should be doing at this stage is moving your fund out of shares because the market is low, a lot of people did that after the Lehman Bros. crash, they then missed the rebound and are now regretting it.

Stupendous

Thanks. mmmm. I'm still not sure what to do now.
The fund is kinda similar to this: http://www.acornlife.ie/index.php?mact=News,cntnt01,detail,0&cntnt01articleid=3&cntnt01returnid=99

I'm not too close to retirement, so the 7 years is not a problem. But I am worried if the Euro economy really crashes worse, as some say it might, that I might lose all my pension.

coylemj

That fund is 75% exposed to the Euro Stoxx 50 Index, the rest of the money will be used to buy derivatives to protect against the index falling below the initial value. That (the 25% used to insure the capital) and the management charges will ensure that you just about get your money back. It sounds like and I'm sure it is a safe investment but you need to be less risk averse if your retirement is a good few years away.

You get nothing for nothing, if you put your money in a fund where the capital is guaranteed you will get very little gain, even in a rising market.

You have to speculate to accumulate. In plain English that means you have to be prepared to gamble and over the medium to long term stocks and shares always give the best return. You need to have all of your money in a managed fund and as your retirement approaches (say the last 7 to 10 years) you should start shifting bit by bit into more secure funds. From what you are saying it's far to early for you to be putting your pension into a secure fund.

Stupendous

Thanks coylemj

I had that feeling alright, and you have confirmed it for me. I will stick where I am. The sales guy really tried to scare me to switch, he nearly succeeded. Damn salesmen.

Thanks for all your helps

coylemj

Trackers are a licence to print money for investment & insurance companies. All they have to do is look at the list of companies, decide which ones will underperform and avoid them. Then if the index goes up by 5%, an investment portfolio consisting of the index companies minus the underperforming companies might go up by 6%, they only have to pay the investors 5% so they pocket the difference, that's where they make the money. Accumulate that over seven years and they are making serious cash, no wonder the sales guy was anxious to get you to switch.

There are several banks like BNP Paribas and Societe Generale in the Euro Stoxx 50 index so simply by building a portfolio which avoids them you can pretty much guarantee that you will outperform the index because the banks will get burned if when the Greeks default on their debt.

Kennie1

Now I am certainly no fan of Acorn and if anyone asked me what your opnion of Acorn, I will always tell them to avoid Acorn due to their charging structure. I was looking at a clients Acorn penison and there was a non allocation period of 18 months for any future premiums increases, This means that if you increased your premium Acorn would pocket the premiums for the next 18 months, there is also a 3.75% p.m. policy fee but their AMC is only 0.5% p.a. which makes one of the lowest in the market.

Non allocation periods and low AMC's are fine if you are starting off your pension young but if you have only 10 or 15 years to retirement this can have a huge impact on your final fund

Now all that said OP you have paid their non allocation period and at this stage you are benefiting from one of the lowest AMC in the industry so I would be very hesitant to transfer the value to another company for this reason alone. It should be noted that Acorn's fund performance has been really good (granted they have not a huge selection to choose from) I would not think though that there would be a commision paid to a rep for getting you to switch to this tracker fund however I may be wrong. I would contact the rep and ask them how much it would cost to switch to this fund and is there any commision in it for him.

I dont think anyone here including myself can advice on Acorn products so you would really need to ask the rep the above questions before you can make an informed decision.

coylemj

Kennie1 wrote: »

I would not think though that there would be a commision paid to a rep for getting you to switch to this tracker fund however I may be wrong.

Really?.....

Stupendous wrote: »

The sales guy really tried to scare me to switch, he nearly succeeded. Damn salesmen.

What was his motivation if not commission? The OP is already paying into an Acorn fund, it's not like he was a new prospect.

Kennie1 wrote: »

I dont think anyone here including myself can advice on Acorn products so you would really need to ask the rep the above questions before you can make an informed decision.

If he wants to make an 'informed' decision I think he'd be better to avoid that particular salesman if all he's trying to do is push him to move to a secure tracker for his pension fund.

A relative of mine worked for one of the big banks in the 80s & 90s, her main job was selling financial products in the branch where she worked. Trackers were the biggest earners in terms of bonuses like weekends in New York, shopping vouchers for hundreds of euros and so on, they are big earners for investment companies and this was reflected in the aggressive sales tactic used by the OP's Acorn salesman.

Kennie1

As I said I maybe wrong, I cannot say whether the agent would get a commision or not.

A relative of mine worked for one of the big banks in the 80s & 90s, her main job was selling financial products in the branch where she worked. Trackers were the biggest earners in terms of bonuses like weekends in New York, shopping vouchers for hundreds of euros and so on, they are big earners for investment companies and this was reflected in the aggressive sales tactic used by the OP's Acorn salesman

Thankfully we do not live in those days from a customer point of view and that there is now real competition in the market place.Tracker Bonds have the lowest commision of any type of bond due to the costs of the capital protection i.e. low corporate yeilds, and higher participation rates when compared to the 90's. That said I am not a fan of tracker products as there is only certain conditions in the stockmarket cycle where you have an increased chance of of getting a higher return than a deposit account, an example of this was the 10 month period after the recovery started in May 2003 where 4 year products made a reasonable return.



Would you like to reconsider the content of your posts regarding how Tracker Bonds are structured and what way product providers make their returns and profits?

Stupendous

Kennie1 wrote: »

Now all that said OP you have paid their non allocation period

Yes, I realised that some time ago, the allocation period was indeed very high, but I only found out it was a killer much later.

Kennie1 wrote: »

and at this stage you are benefiting from one of the lowest AMC in the industry so I would be very hesitant to transfer the value to another company for this reason alone. It should be noted that Acorn's fund performance has been really good

Very interesting. And good to know, thanks.

Kennie1 wrote: »

I would not think though that there would be a commision paid to a rep for getting you to switch to this tracker fund however I may be wrong. I would contact the rep and ask them how much it would cost to switch to this fund and is there any commision in it for him.

I did ask him how much it would cost me, and I think the figure was circa 450/500 euro.

He actually said that putting it in the 'secure tracker' would protect it from being touched by my separating wife.

Kennie1

Stupendous wrote: »

He actually said that putting it in the 'secure tracker' would protect it from being touched by my separating wife.

He said what:eek: What a load of Sh1t. If a pension' s ajustment order is made against your pension the money is transfered on the date that the court orders...end of story.

coylemj

So Kennie1, if tracker bonds give the lowest commission, can you account for the aggressive sales tactics, including downright lies told by the Acorn salesman?

Kennie1

coylemj wrote: »

So Kennie1, if tracker bonds give the lowest commission, can you account for the aggressive sales tactics, including downright lies told by the Acorn salesman?

He might call himself a financial advisor you might call him a salesman, personally I would call him an out right liar if he is in fact an financial advisor!

People like this give the whole industry a bad name. The problem with people like these is that they see it as a short term gain where I would see it as a long term loss. He has lost all creditability with his client and that client would more than likely never buy another product from him again.

Kennie1

I am taking the numbers from a real life tracker product currently in the market place.

20000 investment

Term 4 years 11 months

Index tracked: Each and Every share in the EuroStoxx 50 (the 50 highest valued companies in europe by market capitalization)

Guaranteed return 10% of original investment plus 50% of the growth of the EuroStoxx 50

Possible returns. If the index rises by more than 20% over the term an additional bonus of 10% fo the investment is paid

17490 invested in a bank deposit account, the interest on this deposit will provide a return of 4730 over the 4y11m term and so provide the capital protection plus a 10% guaranteed return.

1360 payed to an investment bank. This money buys a "call option" and potential bonus's. This is basicly a "share option" to buy the index at todays price, if in 4y11m the index produces a return the investment banks buy and sells this index and gives the investor a return with extra bonus's depending on the level of return

1150 This is taken as a charge to pay commisions and administration costs of the fund over the term.

Stupendous

Kennie1 wrote: »

He has lost all creditability with his client and that client would more than likely never buy another product from him again.

No doubt about that. And looking back at the meeting I had with him, I can see I should have known. But he caught me, by chance, at a very vulnerable moment.

coylemj

Stupendous wrote: »

No doubt about that. And looking back at the meeting I had with him, I can see I should have known. But he caught me, by chance, at a very vulnerable moment.

You may find that it wasn't completely by chance. They are trained to catch people precisely at moments when they are vulnerable amenable to a sales pitch.

Stupendous

coylemj wrote: »

You may find that it wasn't completely by chance. They are trained to catch people precisely at moments when they are vulnerable amenable to a sales pitch.

Even more scary.

TomNeville

danbohan wrote: »

do yourself a really big favor and get independent financial advice and stay well well clear of acorn life unless you like paying some of the highest charges in Ireland

Acorn Life has the lowest fees in the market and in 2010 were the highest performers.

http://www.businessandleadership.com/business/item/32449-irish-pension-provider-call

And before anyone asks, yes I am a Qualified Financial Advisor with Acorn Life.

TomNeville

coylemj wrote: »

You may find that it wasn't completely by chance. They are trained to catch people precisely at moments when they are vulnerable amenable to a sales pitch.

Trained to catch people when they are vulnerable? How does that work? I would love that training.

I suspect that you work for a competitor.

TomNeville

Kennie1 wrote: »

I am taking the numbers from a real life tracker product currently in the market place.

20000 investment

Term 4 years 11 months

Index tracked: Each and Every share in the EuroStoxx 50 (the 50 highest valued companies in europe by market capitalization)

Guaranteed return 10% of original investment plus 50% of the growth of the EuroStoxx 50

Possible returns. If the index rises by more than 20% over the term an additional bonus of 10% fo the investment is paid

17490 invested in a bank deposit account, the interest on this deposit will provide a return of 4730 over the 4y11m term and so provide the capital protection plus a 10% guaranteed return.

1360 payed to an investment bank. This money buys a "call option" and potential bonus's. This is basicly a "share option" to buy the index at todays price, if in 4y11m the index produces a return the investment banks buy and sells this index and gives the investor a return with extra bonus's depending on the level of return

1150 This is taken as a charge to pay commisions and administration costs of the fund over the term.

This is complete b/s.


No tracker fund from any company could offer 10% guaranteed return per annum. It is simply impossible. The point of a tracker fund is to avoid risk, so a risk free investment which offers 10% return? Quite simply untrue.

The figures which you give (as well as your incorrect use of apostrophes) are completely bogus.

TomNeville

Stupendous wrote: »

Perhaps I should have said. My pension is already with Acorn Life, so it's too late to worry about high charges. Or is it?

Any initial fees you have paid have already been paid and only admin and management fees are left. ACORN HAS THE LOWEST MANAGEMENT FEES IN IRELAND, 0.5%.

The funds are managed by HSBC and had the best performing pension fund in Ireland in 2010.

Moreover, if you move your pension now, you will be exposed to new initial fees and higher management fees.
http://www.businessandleadership.com/business/item/32449-irish-pension-provider-call

TomNeville

Life is too short to check online, but everybody should check two things.

The pension performance and the fees.

Check these independently and do not rely on internet posts from annonymous people. Some downright lies have been posted here, and worst of all they are actually very bad advice.

Kennie1

TomNeville wrote: »

This is complete b/s.


No tracker fund from any company could offer 10% guaranteed return per annum. It is simply impossible. The point of a tracker fund is to avoid risk, so a risk free investment which offers 10% return? Quite simply untrue.

The figures which you give (as well as your incorrect use of apostrophes) are completely bogus.

Tom would you please read my post again. I never implied that this tracker example would give a return of 10% p.a. So please retract this misleading post.

Kennie1

Hi,

I noticed that you defamed Acorn Life in a post.

You also advised one person very poorly. Have you no conscience.

I am new to the site and only came across your posts while looking forsomething else. I was so annoyed that I registered immediately.

I then see by your posts that you obviously work for a competitor and that you are black-listing everyone else.

I have no option but to report you to the site administrator.

I don't spend my time on the net, life's too short, but I would guess that you are making bugger all sales because you are trolling on line.

Give people proper advice and you won't feel the need to troll.

Regards

above private message received from TomNeville

Tom would you please post links to the posts where I defamed Acorn and where I gave a poor opinion.

I have looked over my posts in this thread and I think that I gave a fair and reasoned post on Acorn and in fact I was the one that gave your company good credit for its fund performance and low management charges and advised against moving funds after the non allocation period.

TomNeville

Kennie1 wrote: »

above private message received from TomNeville

Tom would you please post links to the posts where I defamed Acorn and where I gave a poor opinion.

I have looked over my posts in this thread and I think that I gave a fair and reasoned post on Acorn and in fact I was the one that gave your company good credit for its fund performance and low management charges and advised against moving funds after the non allocation period.

Post No 16 on this thread. 29/09/2011 at 13.32

You outright called one of our associates a liar without any evidence.

"...personally I would call him an outright liar..."

Kennie1 wrote: »

He might call himself a financial advisor you might call him a salesman, personally I would call him an out right liar if he is in fact an financial advisor!

People like this give the whole industry a bad name. The problem with people like these is that they see it as a short term gain where I would see it as a long term loss. He has lost all creditability with his client and that client would more than likely never buy another product from him again.

With regards to credibility, I have my name on my posts and can be easily found through Facebook and LinkedIn.com, as well as declaring that I worked for Acorn. You give only a first name and have a cartoon character as your avatar.

I have no option but to report your post where you accused an associate of lying. If you have evidence of same, then I presume you have reported it to the Financial Services Ombudsman and the Central Bank.

It is obvious that you are a competitor and that you are blacklisting people. I will not engage with you again.

TomNeville

Kennie1 wrote: »

Tom would you please read my post again. I never implied that this tracker example would give a return of 10% p.a. So please retract this misleading post.

You didn't specify that it was per annum, nor did you specify that it was over the lifetime of the tracker.

Kennie1

TomNeville wrote: »

You didn't specify that it was per annum, nor did you specify that it was over the lifetime of the tracker.

So Tom you accuse me of b/s on the basis of an assumption that I implied 10% p.a. despite "p.a." not being used in the post...you should know better considering your past employment in your company.

TomNeville

Kennie1 wrote: »

So Tom you accuse me of b/s on the basis of an assumption that I implied 10% p.a. despite "p.a." not being used in the post...you should know better considering your past employment in your company.

...personally I would call him an outright liar...
I noticed you didn't respond to my point that you defamed Acorn Life without any evidence.

I hope you enjoy your time online, posting lies behind an annonymous handle.

Bye.