Zurich and ILIM are two of the most popular pension/investment fund providers in Ireland.
So who is better…which option is best?
Should you switch or should you stick?
Below are two charts:
- The first chart looks at the long term trailing performance of an aggregate basket of each provider’s most popular funds.
- The second chart below that takes a deeper dive into their respective various fund types (e.g. PRISMA in the case of Zurich Life and MAPS in the case of Irish Life Investment Managers) with relative performance comparisons over the last seven years up until 31 April 2022 (ergo encapsulating the recent downmarket month of Q1 2022).
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Some other considerations on how and why to choose a provider…
Assess security of funds deposits
In this instance both ILIM (now owned by the massive Great West LifeCo Group) and the Swiss-parented Zurich Life are both probably equally as ‘safe’ as any given ‘too big to fail’ institution can be. Furthermore these investments funds types are mutually insured under the Investor Compensation Scheme inthe Irish State.
Compare Annual Management Fees
These are fees charged by the provider (and in some cases the investment broker) which compensate the aforementioned for the services provided to the investor client. Obviously there should be fair pay for fair work – but in some instances we have discovered fees in excess of 4% per annum which obviously would throttle your returns and perhaps should be negotiated down – or we can move your fund to a more reasonable manager.
Compare Allocation Rates
Some funds have say a 98% allocation rate which effectively means that 2% of your contributions are retained as a non-invested cash carry by the provider (for good reasons sometimes albeit this effectively a fee).
Use an independent financial broker
An independent financial broker will have at least five agency relationships with different fund managers so will be able to do a reasonable fair market comparison and suitability report for your specific circumstances.
So should you switch pension provider now?
Zurich have had a better performance by most metrics over the last few years i.e. generally better returns and lower fees (in aggregate – albeit apples and oranges heuristics apply).
Some of Zurich’s competitors might maintain that they have been ‘lucky generals’ insofar that their fund strategy has been more akin to a simple S&P tracker ETF whereas the ILIM stock-pickers were choosier (or in another way the lower maintenance, lower fees Zurich simply caught the 13 year bull run since 2009).
By contrast it could be argued that ILIM by dint have reach within the public sector and through realtionships with Permanent TSB amongst other have onboarded a lot of ‘sleepy’ investors at annual management fee levels which should be challenged.
Every punter has a different story… and a different set of needs.
So if you are looking to switch provider (or start anew), get in touch below.
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