Self-directed also known as self-invested pension plans (SIPPs) are pension plans that may include an insurance company wrapper on the product side, and an appointed stockbroker on the trading side, or if going directly to what’s known as a MiFID investment firm, you may access the product alongside a trading platform.
Small Self-administered Pensions (SSAPs) differ from the above in that they require the appointment of a pensioner trustee, meaning they are more expensive in terms of charges, but do allow investment in property purchased directly through your own pension fund. Notably however, under new EU pension law (IORP Directive), neither company funded SIPPs nor SSAPs, can hold more than 50% of the scheme’s assets in property, although one-member arrangements, do not have to comply with this rule until April 2026.
But no matter the type all self-traded pension are only best suited to very experienced investors, and in most case of insurer wrapped versions, to high-net-worth individuals, given the set minimum contribution and trading levels.
In terms of investment choice, outside of property other asset options include Mutual Funds, publicly traded Shares, Bonds, ETFs, Commodities, Currencies, and Structured Products.
SIPP Charges – Standard Insurance OR MiFID Investment firm
The charges on insurance company SIPPs are made up of advisory set-up fees, an annual fund management charge (levied against your total pension plan portfolio), a possible allocation charge, a possible policy fee, together with related trading and custody charges.
1. Set up and Administration Fees: These fees are charged by SIPP providers for establishing and maintaining your pension account. They typically cover tasks such as setting up the SIPP, handling paperwork, and providing ongoing administrative support.
2. Annual management charges (AMCs): AMCs are recurring fees charged by SIPP providers for managing your pension investments or for the provision of a trading platform. These charges are expressed as a percentage of the value of your pension fund.
3. Contribution Charges: These charges, also known as allocation charges, can be imposed by certain financial advisors seeking to take a renewal commission on insurance company provider options.
4. Dealing Fees: Dealing fees are incurred when you trade investments within your SIPP. These charges can vary depending on the type of investment and the SIPP provider, ranging from fixed fees per transaction to a percentage of the investment amount.
MiFID investment firm offerings, don’t have a set-up charge and they replace the fund management charge with a trading platform charge, unless you choose to include funds and ETFs in your overall portfolio, so this is typically the cheaper than the insurance company self-directed option.
Trading notes:
- To begin trading, on an execution-only basis, there is a minimum trade amount.
- The minimum individual trade on an Advisory or Discretionary accounts may be higher.
- Typically at least 1% of your total portfolio must be maintained in cash.
- There is no charge for the transfer of existing pension funds into a SIPP.
SSAP Charges – MiFID Investment Firm
The charges applying to self-administered pensions, include trustee fees on top of those which apply to self-directed or self-invested pensions.
Insured Pensions – Master Trust EPPs and PRSAs – Best suited to Executives & Business Owners
Traditional, insured pension plans, offer access to a choice of different fund managers and funds under either a Master-Trust – Executive Pension Plan or a PRSA, with the Non-standard PRSAs now proving the preferred PRSA option for those starting early and not restricted by the one times salary funding limit. For well established companies with cash reserves owner directors typically opt for Master Trust allowing for more generous funding scope particularly for large lump sum injections.
Non-standard PRSA Charges
The charges on Non-standard PRSAs (which offer broader fund choice than standard PRSAs) are made up of a combined annual management charge or AMC made up of the funds management charge (FMC) + the broker support charge.
1. Annual Advisor Support Charges: There is no set-up charge for a PRSA and the advisor annual support charge is built on top of the FMC. Our clients pay a flat broker support charge of 0.25% per annum.
2. Annual fund management charges: FMCs are recurring fees charged by PRSA provider fund managers for managing your pension investments. These charges are expressed as a percentage of the value of your pension fund and cover portfolio management, and regular reporting. Our clients pay an FMC totaling 0.75% per annum, with a minimum contribution requirement of €1,000 PM.
3. Contribution Charges: These charges, also known as allocation charges, can be imposed by certain financial advisors seeking to take a renewal commission and can amount to up to 5% of the amount invested. We grant 100% allocation, meaning that there are no allocation charges.
4. Dealing Fees: There are no dealing charges.
5. Policy Fee: There is no policy fee.
6. Set up charge: Nil
Master Trust – Executive Pension Charges
The charges on Master Trusts are made up of an annual management charge or AMC made up of the funds management charge (FMC) + the broker support charge.
1. Annual Advisor Support Charges: There is no set-up charge for a Master Trust and the advisor annual support charge is built on top of the FMC. Our clients pay a flat broker support charge of 0.25% per annum.
2. Annual fund management charges: FMCs are recurring fees charged by the providers fund managers for managing your pension investments. These charges are expressed as a percentage of the value of your pension fund and cover portfolio management, and regular reporting. Our clients pay an FMC totaling 0.75% per annum, with a minimum contribution requirement of €1,000 PM.
3. Contribution Charges: To account for the additional audit and reporting charges now imposed on Master Trusts, there is typically a 2% contribution charge.
4. Dealing Fees: There are no dealing charges.
5. Policy Fee: a policy in the region of 4.00 PM may apply.
6. Set up charge: Nil
Speak with a Financial Advisor
To arrange your free no no-obligation consultation by phone, video conference, or in-person contact us today. Contact: Ken O’Gorman – Director – QFA, CB, SIA, RPA – Pension Specialist – One Quote Financial Brokers on: 01 845 0049 or email: ken@onequote.ie
Or enquire online and give us a quick outline of how we can help.
