Advice provided by the multi-award winning Aisa Group.
Our award winning advisers tell the story of a QROPS loser, and how you can avoid being one.
4 key questions you need to ask yourself:
Did you receive free advice? (The Provider paid your fee)
Is your QROPS in Guernsey, New Zealand, Malta or Gibraltar?
Are your pension 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 funds, or locked away for a minimum time period?
If you answered ‘Yes’ to at least 3 of these, you should take action, or you will lose out in your future retirement.
If you answered ‘Yes’ to all 4, then the chances are you have already lost part of your retirement fund, and compromised your future retirement plans. 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 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 QROPS, 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.
You should contact your trustees to find out your insurance bond surrender penalty.
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 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 retirement income by taking action now.
Watch our video
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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.
Q: The advice I received was paid for by the product provider I was recommended. Why is that severely impacting on my retirement fund?
A: Your product provider paid a commission to the adviser’s company which is not reclaimable. If you want to access your funds in the early years (up to 10 years) your funds have to repay this commission plus provider charges in the form of an access or surrender penalty. In the meantime additional charges are put onto your funds for years in order to recoup this commission. All these surrender penalties and charges impact on the future growth which compound up over the years to severely impact your retirement fund.
Q: I have been told I am only paying 1% per annum for Fees / charges. Is this true?
A: If you are investing into equities or associated collective funds, then this is unlikely to be true. You should seek a review from an independent adviser.
Q: I was never told the commissions the adviser was receiving. What would they have received?
A: Usually between 6-9% plus another 3-5% for Structured products and funds with different buy and sell price. In the worst case scenarios we have seen people who have paid 14% up front commissions without being aware. For a £150,000 fund then this represents £21,000 of commissions and total charges in the first 5 years of around £27,000 without any 1% annual servicing charge added on.
Q: I was told to invest in funds that a different buy and sell price. (front-end or back-end loaded were common terms) how does that severely impact on my pension?
A: Put bluntly this is just another additional commission, often hidden and not declared. These type of funds are banned in the UK due to the severe impact on returns and poor client outcomes.
Q: I have been told that I am only paying 1% annual servicing charge. Is this true?
A: Possibly yes. However, this is only what you pay the adviser for his / her annual review work. On top of this are charges linked to the platform/ bond, funds and commissions which can add up to a lot.
Advice provided by the multi-award winning Aisa Group.