What to expect when owning units of account? (Photo credit: © Joao – stock.adobe.com)
Every year, managers of life insurance contracts take a fee from the funds held by their clients. How much are these for units of account? The firm Good Value For Money provides some answers.
Life insurance contracts make it possible to invest in different categories of support: euro funds, whose capital is guaranteed, and unit-linked funds, which may possibly enable better performance to be achieved, but which are more risky. The firm Good Value For Money took an interest in the amount of fees charged by contract managers on this second category of investment support. What to expect when owning units of account?
The 5 main categories of unit-linked fees
The performance of units of account being generally indicated net, that is to say net of fees, it is sometimes difficult for savers to know exactly how much they are costing them. And for good reason, 5 major categories of fees can be deducted from units of account, and increase the bill.
First, retrocessions are paid to the companies that distribute the contract. In addition, a margin is applied by the management company. There are also financial “outperformance” fees, which apply when the performance of the index exceeds a certain threshold. In addition, the asset manager’s remuneration makes it possible to pay for services such as managed management or management under mandate.
Finally, fees specific to certain types of media may also apply, in particular for SCPIs, trackers or live securities. Good Value For Money thus explains that the costs “may vary according to the nature of the supports, in particular on real estate supports of the SCPI type for which they are much higher”. In total, the costs levied on life insurance contracts for the management of unit-linked units are on average 0.80% per year according to the firm Good Value For Money, with sometimes large differences between the different players. of the market.
Instructions for limiting the costs on your life insurance contract
It is possible at any time to start a negotiation with your financial adviser to reduce the amount of management fees on account units, and even on other tariff lines: fees on payment, arbitration fees, fees on euro funds, etc. To be properly prepared, it is first necessary to know your life insurance contract well.
Since July 1, the pre-contractual information contains all the essential data on the investment vehicles, namely: the name of the management company, the gross performance and the net performance (after deduction of fees) of the asset, the management fees, total fees, final performance and commission retrocessions. The firm Good Value For Money also recalls the following: “The fixed costs deducted by the asset manager are indicated in the legal documents (DICI) of each medium. But in reality, the costs actually deducted, namely the current costs, are almost always higher than fixed fees due to transaction costs on the one hand, as well as so-called performance fees”.
It is also possible to contact your insurance company directly to obtain all of this information. Once equipped with these elements, it is easy to compare your contract with that of other insurers. The choice to open a new life insurance contract can thus make it possible to make significant savings, in particular thanks to the many contracts free of charge on payments and on arbitrations offered by online banks and certain neo-insurers. On the other hand, it is important to take into account that the tax anteriority is lost when opening a new contract. It is therefore all the more important to choose the best manager as soon as possible.