Meet Maeve - Retired Company Director aged 68
Maeve had retired from her company age 60. She accessed her pension at that time, and after taking a tax-free lump sum from the pension she also had an ARF valued at €210,000.
Maeve wanted to understand why her ARF had not risen in value as the underlying investment growth on the fund was circa 6% per annum, and Maeve was only taking income from the ARF of about 4% per annum.
We took the following actions
1. Annual Management Fee Review
The annual management fee on Maeve’s original ARF was 1.75% per annum. This explained why the ARF fund struggled to gain in value. ARF Ireland managed to negotiate a lower fee of 1.25% per annum (including ARF Ireland's annual advisory fee), which would yield a reduction of 0.5% or €1,050 over 1 year based on a fund value of €210,000. This 0.5% reduction would also apply annually, so Maeve would, over time, hope to see considerable savings.
2. Clear Explanations
We transferred Maeve’s existing ARF to a new ARF Provider to secure the lower fee, and we reviewed the performance of Maeve’s ARF with her every 9 months.
If you are unsure or unhappy about your existing ARF arrangements, click here to find out what you can do.