Europe Brings Complete Transparency to Investing

The introduction of a new piece of legislation at the end of the year is rarely cause for celebration, let alone notice, and with a name like ‘Markets in Financial Instruments Directive (MiFID II)’ it wasn’t at the top of most people’s reading list for January. That’s a pity though, because this Directive is poised to transform Europe’s financial industry and, by extension, the experience of investors just like you. Almost a decade in the making, it attempts to standardise the investment markets across the Eurozone and offer greater protection to investors themselves.

Unfortunately, the entire piece extends to 1.4 million paragraphs, so you’ll be glad to know that we’ve focused on the really important bit for you here.

Cost Transparency

As you may know if you’d met with us to discuss investing, our two biggest gripes are transparency and cost (the other is taxation, but that’s not actually addressed here). Usually connected, we know from global research that the ‘declared’ cost or fee of an investment fund/product is rarely the true cost and that this real charge to the investor is hidden under a duvet of technical language and structures.

At Curran Financial Services, we very much broke the mould in this space, offering our investment clients a fully transparent view of the costs associated with using us. The term ‘Total Expense Ratio’ incorporated the fund charge as well as the cost of the Custodian (i.e. platform provider) and our fees. In many instances we were able to show that this was cheaper than the declared fees presented by our competitors in the life insurance industry, but we always suspected that there was a huge gap still left to be discovered.

What MiFID has done is force Investment companies to finally disclose the actual cost of their investment funds in totality and the results are both infuriating and a relief to those of us who suspected them all along.

As part of the legislation, each company must now provide a fund KEY INFORMATION DOCUMENT. These can be found online and cannot be hidden from investors or their advisors. Inside these documents are a number of pieces of information relevant to anyone thinking of investing their money, or people already invested wondering how their returns have been impacted by various factors. This information includes:

  • Risk Indicator: Using a European standard known as ISME that ranks an investment on a 1 – 7 scale based on perceived risk.
  • Performance Scenarios: Assumes either a €10,000 once off investment or a regular €1,000 per month contribution and shows what the likely result would be if you withdrew your money after one, four or seven years under 4 different ‘market’ scenarios.
  • Costs: In our view, the most important information. A first table shows the impact of costs if you were to cash out of your investment in a certain period. A second table shows the impact of costs per year – including once off Entry/Exit charges, annual or ongoing fees  and other incidental charges.

Real Life versions of these Documents from the different investment companies can be found here:

Zurich Life

Irish Life

New Ireland

After spending a number of days looking at the figures presented by the various companies (not just the ones above) we are more convinced than ever of the appropriateness of our Philosophy, Strategy and Approach when bench marked against the offerings of the larger providers, and it is useful to see in clear figures the difference in our charges (up to 50% per annum!). As an example, we prepared the following table to show the difference in our fund charges. Please note that the figure for CFS includes the Davy custodian fee and our ongoing management fee, which ensures we continue to watch and maintain our clients’ portfolios.

Even better, we can now comprehensively assess all client existing portfolios and not simply compare the ‘Annual Management Charge’ to our own, but rather the full breadth of fees being levied by the investment companies. As an example, we can see the prices of the most popular funds from each of the 3 referenced providers above. All are ESMA Risk 4 for consistency, which would usually involve a ‘balanced’ portfolio with a mixture of assets like equities, bonds, property and commodities.




Talk to us today about getting the true cost of your investment portfolios and how they compare to our own. Charges aren’t everything when it comes to investing, but they are a lot, so reducing them as much as possible is the sensible thing to do.

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