Is 4/100 ever 0.04% ?

HarryD

Sounds like a weird question but it has good reason.

I was talking with a financial guy who was trying to sell me a pension.
I was concerned about one aspect of the pension, where I would be
fined something like 4EUR per 100EUR if I miss a payment. (figures not exact)
The guy tried to put my mind at rest saying it was just 0.04% I was worried about. I thought about it and said, no 4 out of 100 is 4%, not 0.04%.
He said, in economics things are different (to engineering where I work),
and that 4/100 is in fact 0.04%.

Now, I've done lotsa maths in my time and 4/100 has always been 4%.
Can anyone confirm that in Economics 4/100 can be 0.04% ?

The reason it's important, is because if I find out he was lying to me,
I'm gonna have to blank him, as I'm not gonna trust a liar with my money.

TIA,
Ray.

Meh

Either he was lying to you or he's a moron. In neither case should you trust him with your money,

DiscoStu

thats a load of cobblers. do not give him any money.

p.pete

Let them (and his bosses) know why your not taking the pension. I'm not an economist but even if it is only 0.04% it's still 4EUR from every EUR100, whatever slant you want to put on the figures.

Is this a reputable compnay?

fintan

its 4%
He is probably confused between 4% and 4 basis points which would be a common financial way of calculating commission, yield, fines etc

One basis point = .01% so its one-hundreth of one percent

galactus

There's no way the guy is that big an idiot, immediately report the company to Consumer Affairs:

http://www.odca.ie/

RainyDay

Run, run quickly. Do not stop. Do not pass Go.

The whole idea of being 'fined' for not making a pension payment is ludicrous. This isn't a credit card. It's your money, not theirs. Please do name & shame the broker.

And do some research before you hand over your money to anyone. Check out the Askaboutmoney.com Guide to Savings & Investments.

De Rebel

Cent is the latin for hundred, percent quite literally means per hundred, therefore 4percent = 4 per hundred.

RainyDay wrote:

Run, run quickly. Do not stop. Do not pass Go.

I'd second that.

RainyDay wrote:

Please do name & shame the broker......

Of course that is good advice too, but its so tempting to point out that there are exceptions to every rule........

HarryD

Thanks for the advice guys..
The guy was wondering why I was making such a big deal about it..
I didn't want to tell him, it's because I think he was lying..

I'd prefer not to name the broker. He's MD of agency who deal
specifically with people off-shore, to take advantage of tax breaks.
He's Irish, and seems like a decent guy.

The whole idea of being 'fined' for not making a pension payment is ludicrous.

Is it ?
This pension plan, had a 12-13% return per year over the last 4yrs, which I think is pretty good.
He could offer me other plans, with no penalties for missed payments but where I just get 4-5% return.
I reckoned the former was a better deal overall..
I could take 1% out per year, which I could use against missed payments if necessary.

RainyDay

HarryD wrote:

I'd prefer not to name the broker. He's MD of agency who deal
specifically with people off-shore, to take advantage of tax breaks.
He's Irish, and seems like a decent guy.

Be very, very careful. He 'seems like a decent guy' because he is trying desperately to get his commission on selling you a pension. That's how he makes his living. As you already suspect this man is lying, believe nothing that he tells you and do your research independently.

The off-shore issue is a legal/tax minefield. Are you tax-resident outside Ireland? If so, you may well not be eligible for Irish tax breaks on pensions. In which case, why not just make a straight investment in the stock market through any unit-linked fund and avoid the many restrictions that are coming with this pension fund?

HarryD wrote:

Is it ?
This pension plan, had a 12-13% return per year over the last 4yrs, which I think is pretty good.
He could offer me other plans, with no penalties for missed payments but where I just get 4-5% return.
I reckoned the former was a better deal overall..
I could take 1% out per year, which I could use against missed payments if necessary.

This sounds very suspicious to me. Please quote the name of the fund and check the past performance figures he is quoting. As a general rule, treat any financial investment which is promising 12% per annum with extreme caution simply because it is too good to be true. Don't fall into the trap of letting your greed blind your judgement. You need to look into this very carefully. Anyway, the oul 'past performance is no guarantee....' disclaimer is very relevant. Even if they did get this performance in the past, there is no guarantee that they will continue to do so. No pension fund manager has consistently beaten the market indices - it just doesn't happen.

I suspect the reason that this fund is placing restrictions on missed payments is that they are funding the salesman commission out of your first year's payments. What commission will he be getting out of this deal? What charges (bid/offer spread, annual administration fee, allocation rate) will apply to this fund?

Victor

He's a scummer. Low life lower than a marketer.

The 4% just shows how not clued in he is and now he knows he's caught he's trying to play the "But I'm an expert" card to brow beat you.

The only way it could be 0.04% is if you were, perhaps, dealing with a total investment of €10000.

agency who deal specifically with people off-shore, to take advantage of tax breaks.

Just how much of a better deal can you get than the exchequer giving you a full tax break, basicly doubling the cash amount you put in.

Oh, what currency is the fund in. It would be very easy for a dollar-denominated fund to have such growth. However, dollar-denominated is useless to you as the dollar has fallen.

lomb

total scam, 12% based on some kind of pyramid scheme-no one legitimately generates these returns these days on a balanced portfolio, run and run fast.