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Unlock the Bank Vault



You would be forgiven for believing that your bank is the perfect businessvault_door model as a one-stop shop; for all things ‘financial’. After all, you can buy almost any financially related product from them and they keep telling us how good they are. If you don’t have the time to do adequate research on the product/s you want to buy, it is comforting to know that they will look after you.

It is folly to believe that you are getting the best deal possible on the full range of financial products available, from your bank. If you are of the opinion that your bank has your best interest at heart, then you need to give yourself a good shake. Their business model is based on maximising profit by cross-selling an array of products to folk that do not have the time or inclination to make informed product decisions. They are masters of the ‘trust us’ game and target consumer inertia.

My language may appear emotive on this subject but it is something that I feel very strongly about. It is not very often that new clients come to me, full of the praises for the investment or pension product that they have purchased through their bank. More often than not, they come to me because they are frustrated by the level of service they are getting from the institution that ‘sold’ them the product.

The following is an alternative approach that you could use so as to take full advantage of what your bank has on offer so that you get to keep more of your money. You have to be smarter than they think they are.

Your bank calls you up and asks if you would be interested in a ‘Free’ Financial Review from their resident expert financial planner. The only motive that your bank has for doing this is that they are going to try and sell you a product that they can get paid on. This can be a Life Insurance, Unit-Linked Savings, Pension or Investment product.

You don’t get too many opportunities to get something for nothing from your bank, so take the offer. Pay attention to what is being said, or recommended, and don’t be afraid to ask questions and take notes about the costs/charges. But, just don’t buy or sign up to anything until you have fully researched an equivalent product on the open market.

I would be very surprised if you could not buy a more competitive product elsewhere: especially on-line. The savings can run in to thousands of Euro over the lifetime of the product.

Is it not far better that these savings are transferred to your ‘personal balance sheet’ as opposed to the balance sheet of your local friendly bank?



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The Author:

I am a Financial Advisor who is authorised to provide broad based financial advice in relation to PRSA's, Pensions, Life Insurance and other Insured Investment Products in Ireland. Special Focus: Low-Cost 'Execution Only' Financial Products http://www.investandsave.ie

Add Your Comment

  • http://twitter.com/PreciousRings Eoin McDonnell

    Sian,
    It is great you are bringing this issue to the attention of those who are not aware. We at Precious have been contacted by Matchmaker on a number of occasions, in the most recent they claimed to be Google. What rang alarm bells for me was their reluctance to put any of their claims and sales pitch into an email, and their urgency to take credit card details ‘right now’. My recommendation would be to ask around before deciding on an agency.

  • http://twitter.com/aileen456 aileen456

    ‘target consumer inertia.’ I know what you mean, when we all had to introduce the PRSA thing to our employees, the banks all rang and gave us the easy option ‘ill call in a give you a plaque and say you complied with the regulations in return for your employees names and contacts’
    or something to that effect. Customer inertia won out there alright!

  • Anonymous

    One of the features of PRSAs is that you can move provider pretty easily. There can’t be a transfer charge if you want to move your existing fund elsewhere.

    The employer/employees could be paying up to 5% of each and every contribution made. If they are not getting a good service for that charge then they should look at reducing this cost.

    Pension/PRSA Planning is about funding for your retirement NOT the bank employees retirement.

  • http://www.sortmybooks.com Anne Hannan

    Great post Gerard. When I was getting my mortgage a couple of years ago I followed your advice and was able to quote prices that I had found online for things like mortgage term insurance and house insurance to the Bank’s financial advisor. Eventually she admitted defeat and said ‘I can’t come near those prices’. Shopping around is critical.

  • Anonymous

    Hi Anne,

    Good for you. If enough people did what you did, it would force the banks to reconsider what they are offering and drive prices lower.

    Unfortunately, that is not the case as the majority will take the easy option, even though it costs them more money. It all about ‘information’, the more you have the more ‘cash rich’ you become.

  • http://www.irishtimes.com/money/pension-funds pension funds ireland

    Nice post..thanks,nWhen the pensioned employee retires, she or he can ask for the entire npension in one lump sum or can take the pension as an annuity, which is an series of payments that lasts for a specified period of time. If the nretiree lives long enough, she or he will receive more money than the nemployer originally withheld.

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    Providing financial protection for your familyu00a0is an essential part ofu00a0life assurance ireland policies.