International Pensions Warning

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Helen Back
Posts: 242
Joined: Fri Dec 28, 2012 4:16 pm

International Pensions Warning

Post by Helen Back »

We've had 'financial advisors' peddling these 'pensions' to teachers at both the schools I've worked at (two different continents). If you are considering investing in a pension from deVere, Royal London 360 (RL360), (Royal) Skandia, Friend Provident (Friends Life), Nomura, Generali, or Zurich International, you might want to think again.

http://www.telegraph.co.uk/finance/pers ... lions.html

Here's some extra info.

http://andrewhallam.com/category/expat- ... provident/
Sonnypest264
Posts: 20
Joined: Fri Nov 21, 2014 5:02 am

Re: International Pensions Warning

Post by Sonnypest264 »

Having fallen foul of one of these set ups, run by Montpelier Malaysia, I would whole heartedly advise people to stay away. Do not surrender UK teacher pension final salary schemes for these so called off shore flexible pension funds, they are just money making schemes for under-regulated advisors who take the money and don't give a stuff about your money. Do not under any circumstances go with Montpelier, they lie to their back teeth as shown by the Hume Capital fiasco. I now look after my own investing, there is a huge amount of more independent advice on the internet from more reputable sources, it's not as hard as you might think.
Nemo.
Posts: 34
Joined: Sat Mar 19, 2011 7:04 am

Re: International Pensions Warning

Post by Nemo. »

Yes avoid.

What happened is that in the UK commission based advice was banned. All.now fees. So many young "financial advisers" (like cockroaches IMHO as so many and hard to eradicate) left UK especially for Asia. Promised huge salaries in Asia they were put on minimum wage for work permit plus commissions. But then they found they were lied to so now are desperate. Will sell own grandmother to the devil for a fiver. They usually know.less about finance than anyone else and only see the huge commissions.

Think Arthur Dailey cross bred with "Loads of Money" (Brits will understand this if older)
mathphyschap
Posts: 17
Joined: Wed Oct 28, 2015 3:58 am

Re: International Pensions Warning

Post by mathphyschap »

I feel this post should be bumped up (every few months)

Either a self managed/tracker fund or buy to let (rental) investment will work fine for IE. Stay away from any glossy brochures showing happy middle aged or retired people on a boat or beach - the guys selling you these expat life assurance or pension packages are trying to take you for a muppet. They take fees upfront (ie. from the first 12-36 months payments- read the small print) and then invest in tracker funds (which you can do yourself easily) and then they charge you another 1-2% a year.

I didn't name names in any earlier posts but on reflection I think might share my own experience with Austen Morris trying to get me to sign up to the Generali Vision life assurance plan. The sales rep was a friend of a friend and I met with him mostly because he confused politeness with thinking I wanted a meeting. He was pleasant but alarm bells started immediately when he presented two projections of 7% or 12% growth in the stock market over a 30 year time frame -12% !! I He then went straight on to talk about Generali Vision (que the brochure with pictures of boats, beaches and sunsets) before I could have a proper debate about the likelihood of 12% return after tax. I think that was his pitch he had been trained to give to IE teachers.

I ended up looking over the small print of Generali Vision and the Austen Morris materials and (at that time) it was just a bad deal. The first 36 months of payments (in my case would have been US $1200 a month) just go towards covering the fees (you get nothing back if you drop out). After that you have a fund basically linked to the stock market with two management fees (both 1-2%) and additional fixed fees. Even if the stock market goes up 7% a year you are likely to end up with 3-4%.

And I'm not the only one to have a bad experience

http://answers.echinacities.com/questio ... tin-morris

http://www.shanghaiexpat.com/phpbbforum ... 65-30.html

I think a good rule of thumb is only use financial services which have a significant presence in Europe or North America and are regulated there. Even then be very careful.
PsyGuy
Posts: 10789
Joined: Wed Oct 12, 2011 9:51 am
Location: Northern Europe

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Post by PsyGuy »

Buy to rent property schemes are just that schemes. They arent an investments, they are businesses. They are as much work as any job, and have significant risk associated with them.

A lot of investment advisors saw a dramatic drop in their revenue when regulation became heavier.
That doesnt mean you cant be swindled in the US or UK or anywhere really. There are still some really bad investment programs and portfolios that take your money, and just take your money in the US . Why these still exist is because actively managed funds and portfolios are still generating trading fees and annual fees compared to passive indexed funds that are very low or no cost. There are basically two US standards, Suitability and Fiduciary. The Suitability standard requires an advisor to only present investment opportunities that are suitable to your investment profile, this really isnt much of a standard, as suitable is a very broad definition. The other standard is Fiduciary. The fiduciary standard requires an advisor to work in their clients best interest. The fiduciary standard is the standard that gives you the investor the best safety. The problem with that standard is that advisors have to make a living and many of them expect to make a good living. That living has to be funded by someone and its either going to be you the client or the company/firm thats marketing the investment.

Its not impossible to get a 7%-12% return, you just have to be comfortable with the risk and resources necessary to do it. A very aggressive investment allocation that relies heavily on small cap stocks would give you that return, but you would also be absorbing a much higher amount of risk that your portfolio would lose substantial value. Once you start looking at double digit returns your investment commitment looks more like that of a day trader.

There are incidentally a number of trailing spouses, ITs and others involved in IE that do various financial advising in various rolls.
expatscot
Posts: 307
Joined: Thu Jan 14, 2016 4:26 am

Re: International Pensions Warning

Post by expatscot »

In my experience (a career in financial services before becoming a teacher) a 7% return is not impossible but is pretty unlikely in the current economic environment - unless you hit lucky or have some seriously risky stocks or bonds. 12%, though, is incredibly difficult to reach even in the good times and will most likely mean investing in funds which, for the average investor, are probably not suitable or in any way similar to their risk profile.

The UK requires that sales reps look to the client's risk profile - this means looking at their current investments, their ability to lose money, current earnings, age, etc. Most teachers would probably have a fairly low risk profile, making those high risk investments unsuitable. In addition, a final salary scheme - in particular any UK teachers' pension - should NEVER be transferred out as you will never be able to get the same guarantees or protection from another investment.

If I was looking for a financial advisor, being from the UK the things I would look for from an advisor are:

1. Regulation within the UK - there are some financial advisors who still hold their UK registration. To keep that, they still have to stick to the UK standards, and if they fail they can be struck off. This won't stop them operating in the Far East, but would mean they couldn't work in the UK, EU, USA or places like Australia.

2. Links to a UK bank. Reputational risk, really. Banks are trying to get away from the image that they're just a bunch of rip-off merchants.

3. One who answers my questions. I probably know about as much about the financial markets as they do, so I do sense when they hit the BS button.

There are some good, genuine advisors out there. There are some dodgy ones too. You can say the same about car dealers. You just have to do a bit of work first and really be on your toes when dealing with them.
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