Imagine you are in a job where your pay is driven by the length of the contract the customer signs. Simply, you need to convince the customer, we will call them “someone”, that it is in their best interests to have a longer contract!
Offshore Savings Plan world!
All you have to do is:
Promote longer terms through by making available an added bonus which is not available on short term offshore savings plan policies
Talk about flexibility and short term access or “paid-up” periods; “someone” can stop, restart or access their capital at any time on an offshore savings plan
Maybe talk about investment growth being greater over long term rather than short term volatility
Talk about “dollar cost averaging” and saving for the future related to “someone’s” children, retirement, education.
By convincing “someone” that a longer term is better for them, you can buy yourself a car rather than a watch through the greater commission earnings paid.
You think I am kidding?! On a $1,500 a month offshore savings plan or pension policy the difference in commission is colossal. In fact, you would earn $18,900 instead of $3,780 if the policy term was 25 years instead of 5 years.
Most salespeople are interested, although there are some unfortunate facts of life being ignored here – out of every 100 clients, less than 50 will keep their offshore savings plan for over 10 years, and less than 10% will keep the offshore savings plan to maturity; and this is where the catch lies, because all those ‘someones’ get heavily penalised if they cease or reduce payments early.
Welcome to the great offshore savings plan rip off…!
On a 25 year offshore savings plan policy, almost all of the premiums those ‘someones’ make in the first 2 years go towards the commission which will buy your new car. Will you care in 3 years if those ‘someones’ stop paying into the offshore savings plan and find out it is worthless? Will you care in 8 years if the offshore savings plan is worth less than the contributions made? Any feeling of guilt will probably last until you fire up the engine and see how fast your car gets to 100!
Most salesman get round the feeling of guilt by insisting that the “someone” they sold the offshore savings plan to may well be one of the 10% who makes it to the end, whose circumstances never change, who will be guaranteed to keep a offshore savings plan going 25 years; the equivalent of 5 full UK government terms or 6 US presidential terms, the equivalent of Wilson to Blair, or Carter to Bush (George W). Yep, and when their “someone” make that final payment, they will obtain all those promised bonus payments (which are otherwise never awarded, or indeed taken away if the offshore savings plan is cashed in early).
The truth is in 5 years, by the time any of your ‘someones’ need access to their offshore savings plan and realise that they have no money left, your car will have been replaced, and you have moved onto another company or another country and maybe another job and you will never really know if your happiness was balanced by someone’s misery.
There are unscrupulous advisers according to newspapers such as the Telegraph that rip off clients due to hidden commissions that were not declared to the client, who in the words of the Telegraph cost british expats billions in hidden charges and suspect funds. Avoid these advisers at all costs.
Is there an alternative in the offshore savings plan world?
Yes! You could actually want to do the right thing by your clients by not taking accepting earnings linked to getting the client to sign a long term offshore savings plan, by not taking a hidden commission on regular premium offshore savings plan but by taking a transparent fee – agreed by the client.
There is a downside… that car you want, it will have to come through hard work and your happiness will have to be viewed long term through the investments of your clients improving
There is another benefit, but you have to wait a while like I did; after a few years you will be building a business based on transparency, trust and referral. Your clients will be better off and they will happily pay more fees for trusted advice and re-assurance. Your clients will become your best salesforce and you can still afford a car; you just had to be patient!
Hate being ripped off? Want to know more? Then have a look at my video:
See various video’s about this at our channel TAILORMADE FUTURE.
Don’t be “someone” who is ripped off and be sold an offshore savings plan on the promises of free advice, bonus’, extra allocations, promised flexibility and 12% growth.
If you want a offshore savings plan go for transparency, explicit fees, and ignore all those promises of jam tomorrow especially if made by a salesperson suggesting long term an offshore savings plan will be good for you (when they actually mean it’s good for them).
The views expressed in this article are not to be construed as personal advice. You should contact a qualified and ideally regulated adviser in order to obtain up to date personal advice with regard to your own personal circumstances. If you do not then you are acting under your own authority and deemed “execution only”. The author does not except any liability for people acting without personalised advice, who base a decision on views expressed in this generic article. Where this article is dated then it is based on legislation as of the date. Legislation changes but articles are rarely updated, although sometimes a new article is written; so, please check for later articles or changes in legislation on official government websites, as this article should not be relied on in isolation.
This article was published in June 2015
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