Our award winning advisers give the low down on how you can avoid unnecessary offshore bond charges.
4 key questions you need to ask yourself:
Did you receive free advice? (The Provider paid your fee)
Have you been advised that your investment costs 1% per annum, or is locked up for a minimum time period?
Are your investment assets held within companies such as RL360, OMI, Friends Provident International, Zurich, SEB, Generali, Hansard, Investors Trust?
Are some or all of your investments in non-regulated, structured or esoteric funds?
If you answered ‘Yes’ to at least 3 of these, you should take action, or you will lose out on future investment returns.
If you answered ‘Yes’ to all 4, then the chances are you have already lost part of your investment funds, and compromised your future investment returns. You need take action immediately.
If you do not understand the significance of these questions you need advice now!
Nigel, not his real name, was sold an offshore bond in a QROPS on the basis that it would be better for tax, more flexible access, highly protected and would remove it “from the clutches of the Treasury” in the UK.
What was Nigel told?
He was told it had a 1% annual charge plus trustee fees of €500 per annum. He was promised double digit returns if he locked part of his money up for 6 years.
What happened next?
If Nigel’s story is your story, then his outcome could be your outcome. Nigel lost his pension and his retirement was destroyed.
What should you check now to avoid this?
Nigel did not know what an insurance bond wrapper was. Why would he and why would you? However, it is critical.
You will have been told an insurance bond wrapper is an investment bond or fund platform or investment manager or tax efficient vehicle. There are many ways to describe it, but it can be a force for good or one of the most damaging products you can own. It’s also completely unnecessary in a QROPS or a SIPP!
How bad is your problem?
If an insurance bond is unnecessary, why would it be sold to you inside a QROPS or SIPP. Remember question 1 above, and the idea that you did not have to pay for advice? The insurance bond wrapper can pay a large commission to unscrupulous salesman. Along with other commission products it can be up to 13% of your fund.
Nigel lost most of his money in his QROPS. He had no reason to think that he had any problem until the salesman disappeared. He had been lied to by his adviser and the chances are, if you are like Nigel, and your salesman is telling that the charges are only 1% per annum, then your salesman lied to you as well.
What is the solution?
If you are concerned about your investment, or the person who sold it to you has disappeared, or you are only contacted to “switch” your investments around (generating more commission) then:
You should stop switching funds immediately.
Avoid locking your funds into further 5 or 6 year term investments.
Invest using clean share classes where possible, or obtain managed portfolios linked to your risk.
If you have a pension, you should ask your trustees why they permitted your pension to be invested in an insurance bond, and also what due diligence they did on the adviser who gave the advice they followed. Ask them to find out your insurance bond surrender penalty.
Ask for a professional to assess your risk and target for retirement. Maybe, pay for a report.
Ensure your professional is registered with the regulator in your country AND openly declares third party connections in other regulated territories AND allows you to vet them.
Avoid further loss of your future investment growth by taking action now.
Challenging the status quo
Over the last 20 years we have wanted to change the status quo by focusing on making life better for consumers. Ferocious independence, due diligence, robust research, strict governance and procedures aligned with transparency on fees, charges and the “truth” have helped establish us as the “go to” award winning financial adviser.
Our research and persistence liaising with providers to deliver what is good for you, the consumer, means we can provide TailorMade intelligent solutions putting you first.
We provide a customer charter to our clients, and PLEASE NOTE we offer the most competitive terms, bettering any legitimate deal that can be evidenced.
We deal exclusively with pension providers that comply with both the spirit and the letter of the UK and US regulations.
We believe this to be in the best interests of our clients and in our own professional best interests. Uniquely we offer the best award winning UK IFA spectrum, combined with international experience and knowledge.
Our expert knowledge is provided by the “Aisa Group”. Internationally we have several firms in different countries both within Europe (including the UK) and outside of Europe, often known as Aisa International.
Aisa Group have been acclaimed in the UK for pensions, investment and tax advice – multiple finalists and 20+ times award winners between 2009 and 2018 including UK Investment Excellence awards, UK Pension Awards won and tax planning awards from publications including FT.
Advice provided by the multi-award winning Aisa Group.