Global Eye / PIC / DeVere / Acuma et al - Zurich Vista UAE
Every so often we see posts referring to the above organisations but no real detailed information on what they are selling to us and how to avoid getting trapped by them. I would like to fill the void and warn others of the experience. Every EK/FZ pilot I know have been contacted by these guys at some stage so I’m sure a lot of folk are sadly already trapped in the scheme (and maybe unaware of its pitfalls).
The fact is these companies along with a host of other one man band salesmen are pushing ONE product and one product only: - Zurich Vista (combined insurance and investment policy). Zurich sounds like a trusted household name so why they trash their brand by pushing this product and using local non-FA qualified (in any country) sale people is beyond me. Anyway, heres how this product works in reality;
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Supposedly high return off shore saving plan ideal for the expat pilot. Plans start from 5 years but they will push you into 20 or 25 year plans.
Premium contributions start from 300 USD pm but they will push you to sign up for 2000 USD pm minimum achieve your long term financial goals and receive the maximum bonus on offer.
Your first 18 months of contributions (Initial Contribution Period - ICP) are locked in until close to product maturity after typically 20 years. You will be awarded bonuses against these contributions but this part of your investment is subject to 4% account fees pA for the entire policy term. If you took this product for 25 years, 4 % x 25 years is 100% of all your payments GONE in fees.
So effectively after the ICP your account balance is still ZERO but this is initially masked by the bonuses you have received (which are then eroded over time by the high account fees). Where have all your payments gone? Well apparently equality between the three parties involved… Zurich, the UAE broker and your salesman. These commissions are paid upfront and you are unlikely too see much of your conman for another 12 months (was that one consultation really worth paying him over 12,000 USD?)
12 months in, out of the blue you hear from your "IFA". Great news! Zurich are offering a one time promotion! If you can increase your monthly contributions we can add up to 45% value to your account! If you agree, they have just reset your 18 month ICP again. Again, contributions during this new 18 month period go to the 3 parties and at the end of this 2.5 year period, your redemption charge is still 100% (they keep ALL your money if you close the account, not one dollar back). Everything masked by the bonus they give.
By this stage you might start to dig a little as your balance grows. Why is nobody else talking about this amazing investment opportunity? Finally the penny drops that you are deep in a trap! You consider all your options… cash in and loose all your “investment”, continue as normal or reduce your payments to the minimum amount (300 USD) and ride it out. Unfortunately, they are well ahead of you again. All charges on your account are based on the maximum monthly premium you have ever made (even if this was just for one month) and will be charged for the entire term of your policy, regardless of what you pay in each month. They are charging you on a virtual fund which will eventually also wipe you out.
You can over the term of the policy cash in the funds you have paid in, but there is a huge redemption charge. At year 10 of a 20 year policy, they will keep 54% of your savings!! For someone contributing 2500 USD a month, thats a 162,000 USD fee PLUS all the charges they made over the preceding years.
I have not even touched on the very complex and high charges they make on your account after the ICP period. But in reality after all these deductions, I cannot see how your account can grow more than about 1.2% pA, which, funnily enough, is the figure you need to achieve to get back all of your investment payments you have made over 20 years! If the NET growth after fees is less, you're out of pocket. Why go through all the stress for that? The main point is this will be sold to you as a flexible savings plan, which it certainly is not!
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I hope this helps any new joiner avoid just one of the many financial pitfalls out here in Dubai. If you get a phone call hang up and block the number! LinkedIN request from anyone in Finance or Investment in the UAE - block them!! a business card - burn it!!! Invest back home if anywhere and not in a seemingly totally unregulated market like the UAE.