Offshore bonds and long-term savings plans are provided by some major firms in the Isle of Man, Guernsey, Dublin, the Cayman Islands, Mauritius, etc. These insurers pay the financial salesmen’s commissions. The commissions come straight out of clients’ (=your!) money. This is reminiscent of the once-common practise of paying salespeople in the UK, Europe, and Australia, which is totally prohibited since more than 10 years now.
One instance, which insiders in the business refer to as a “typical” occurrence, had an insurance firm pay a salesman “selling” an offshore bond an upfront commission of 7%. According to the insurance provider, a customer who initially invested $100,000 would shell out $45,600 in fees and commissions over the course of ten years, or close to half of his original investment. A $12,800 surrender fee would be assessed if the user needed access to the funds after a year.
Charges and fees on “regular premium” long-term savings plans, where investors contribute a specified amount each month, can be even more detrimental to investors because they impose severe penalties on those who withdraw their funds before a predetermined period. One client requested access to his money after five and a half years of depositing $350 a month into an offshore savings plan with a 30-year duration. Despite the policy having a value of $5,900, he was informed that the “surrender value” was only $50.92, with the remaining amount being eaten up by fees.
While offshore bonds are frequently employed as a “wrapper,” other investment types, such as pensions like QROPS and SIPP, can also result in significant upfront payments for the salespeople. According to records we’ve seen, ‘the biggest financial advisor in the world’ sold a British guy residing in Thailand a pension through a major insurance company, with set-up costs totaling £45,554—or 12% of his £378,675 fund.
Insurance bonds are frequently exorbitantly priced wrappers, yet the investments they contain sometimes turn out to be disasters. Profits from high-risk assets, such as exotic real estate, wine, timber, or other assets, are often the focus of many unregulated funds. Only “high net worth” and “sophisticated” investors may be sold unregulated funds in Europe, although these limitations do not apply elsewhere. Research indicates that private investors lose money on about 75% of unregulated ventures. Savings have little recourse if they are missold a fund or something goes wrong with it if the fund is not regulated. Something frequently goes wrong because the underlying investments are so illiquid. Millions of investors’ dollars are currently frozen in unregulated, suspended funds until the assets of the fund are sold and unwound.
Alternative Investments & Strategies
- You are probably unaware that it is possible to transfer, without charges, a percentage of the funds you have built up in your existing insurance/offshore bond and/or long term savings plans, to a totally transparent and low cost investment platform ($200 annual membership fee and 0.4% annual management charge with no entry/exit charges).
- This can be achieved without affecting the benefits accrued and protecting future bonuses.
- These alternative investments include a range of funds that are not available within your existing insurance/offshore bond and/or long term savings plans.
- Our preferred funds provide fixed income and/or highly predictable returns of between 8-11% per annum with varying levels of liquidity.
- None of our current range of funds have any initial charges and therefore this is a highly cost efficient exercise.
We specialise in helping people in this predicament
- We will review your contract(s) and offer a free appraisal of the contract(s) in question.
- On the basis that you appoints us as your advisor in respect of your contract(s), we will provide specific investment advice on the life companies existing funds range.
- We will provide you specific information on withdrawing penalty free funds that can be applied to alternative investments or other wealth creation strategies.
- We undertake appropriate due diligence to ensure all of our suggested funds meet your risk/reward criteria.
- We recommend funds that offer capital protection that are uncorrelated with the global equity markets.