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Need input in regards to a financial advisor in Dubai

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Need input in regards to a financial advisor in Dubai

Old 12th Mar 2013, 22:16
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Need input in regards to a financial advisor in Dubai

Hi all DXB-based colleagues,

As many (or perhaps all) of us pilots at Emirates know, "Financial Advisors" from a company named GlobalEye has been harassing us for quite a while. After countless of endless of meaningless calls from them I finally started to agree to meet with them without showing up. After a couple of scheduled meetings they finally left me alone!

However, I would still like to make provisions for my retirement, but I just don't have the knowledge to do it myself and certainly not the time to learn about it.

I've been reading at different forums and from what I've found, Holborn Assets and Acuma are recommended and told to be reputable companies. The problem I see - as a Swedish citizen - is that they don't have a Swedish advisor, hence not familiar with the Swedish tax system (which is very complicated).

Now, here to my "situation" and questions:

I met a Swedish guy at an event a couple of days ago that quite recently moved back to Dubai, working with financial planning. He seemed to be a really nice person and he wasn't pushy at all. Nevertheless, he told me that he was new to the financial planning industry as such (only 6 months) but he has a Masters Degree in economics from one of the highest ranked Uni's in Sweden (auditing and finance, hence familiar with the Swedish tax system) and he has completed the first certification in financial planning. He's also previously been working at the Swedish Ministry of Foreign Affairs in the UAE.

In addition; he has experienced colleagues he could turn to and he hasen't been harassing me like GlobalEye, only an e-mail with some information of the services he provides.

1. What's your input and thoughts in regards of the above?
2. Would you pursuit with this guy given my circumstance and nationality?
3. If no, what do you suggest me to do?

Many thanks in advance!
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Old 13th Mar 2013, 10:56
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Ask yourself. Are you prepared to put your money in the hands of an inexperienced nice guy just because he is from you own country?

I have been chased by the same guys. Including holborne, who besides having funny commercials, are no different that the other commission chasers.
Sell you an off the shelf product and hope for the best. As individuals that all we are privy to. Supermarket products.

The guys that the company provides are not much use either!
We are basically XXXXed
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Old 13th Mar 2013, 10:58
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Hi, I can't speak on the Sweden aspect, but you are right - globaleye aren't the worst, PIC/DeVere are by far the worst! But I wouldn't trust either at all. In the end I used Holborn Assets, look up Keren Bobker, she writes a column in the Gulf News and was able to give me a product that was best for me, not best for their commission! It would be worth speaking to someone on the tax side in your home country about offshore investments etc
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Old 13th Mar 2013, 13:27
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There is no set of circumstances under which you need an advisor, but you do require discipline. There are any number of people who leave Dubai after ten years with nothing to show for it.

Get yourself an Internaxx account. Emirates pilots get "frequent trader" rates on transactions.

Have a read of the Canadian Couch Potato and the Monevator websites.

Start buying ETFs monthly. You probably only need four different ones and you most emphatically do not need any individual stocks nor need to be taking tips from anyone. Pick an asset mix, balance once yearly to retain it and never look at your account in the intervening period or you will do something dumb like attempting to time the market.
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Old 13th Mar 2013, 15:43
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I'm not sure which is the worst, taking financial advice from the numerous sharks in Dubai or from anonymous pilots on a rumour forum. Pilots and their money.....
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Old 13th Mar 2013, 17:20
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It is your money and it is your responsibility. Bit like your health really, you can't delegate looking after it to anybody else.

You might not have the knowledge (at the moment) to plan for your retirement but you have to make time to learn about it. Really, you don't need to spend more than a couple of hours a week on it. Financial planning isn't rocket science and most "advisers" aren't great either, especially in Dubai. Nobody will look after your money as well as you because it doesn't matter as much to anybody else.

Take advice from as many people as you like but make an informed decision based on what you know not what they tell you. Never, ever buy a financial product you don't understand completely. If whoever is offering it (bank, financial adviser, whatever) can't explain it so you do understand you are talking to the wrong people, possibly about the wrong product.

Finally, never take financial advice from pilots. We are almost without exception idiots when it comes to money.

Last edited by BigGeordie; 13th Mar 2013 at 17:23.
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Old 13th Mar 2013, 17:45
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I'd listen to Dropp..he's got the right idea.
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Old 13th Mar 2013, 18:02
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Don't buy ANY 'product'!!!! All the advisors in Dubai try and sell a plan of some kind through one of the major insurance companies. They lock you in, if you can believe it, for a time period and you are required to make monthly investments. All of it is crap!!!

You are better off doing it yourself, as mentioned, or going with a large, reputable brokerage/investment firm that charges you, at most, 1% of your holding to manage your account.

A good firm will sit down with you for several hours, go over your finance (pay, expenses etc), detail you objectives, asses your risk based on age and those objectives (for most it is retirement but also kids schooling etc), develop a FULL financial plan over 5/10/20 years for your savings. You'll get a copy and it will be adjusted yearly.

They will invest your money in stocks, ETFs, bonds etc based on your risk profile and will adjust it as required. The will maximize returns by ensuring some of the investment is in instruments that bring in a return (like preferred shares). A good firm will further that by selling covered calls on some of your stock - a strategy which can add a full 1 percent a year to your return or more.

If the advisor or company is not doing the above then stay away!!! You are not getting you moneys worth and, likely, better off doing it yourself.

Do NOT buy anything that locks you in! Tell them to F off because they are scammers with NO interest in your financial future.
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Old 18th Mar 2013, 09:21
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Thanks for all the answers

Thanks to all of you for your replies!

It is clear that everyone has the same idea in terms of financial advisors in Dubai!

All of you are most likely right and some of you seems to have acquired the knowledge from personal experience. It all sounds logical to me and I tried to put myself into it the past week (hence the long response time). However, I find it to be extremely time-consuming and to be honest - to me it is difficult.

Because of that I contacted the guy and met him last week.
Based on my questions in this forum I was very clear that I didn't want to lock myself into a plan in case of relocation/unemployment/accident or whatever. I also asked him in regards of fees/commission etc and I just wanted to share his suggestions and answers in regards to my questions:

____________________

Following our meeting he sent me a presentation (Powerpoint covering a summary of our meeting, the solution, and FAQ's) which he wanted to present further (which he did yesterday).

Solution/products:

- Long term savings: Generali 5 years plan with an initial contribution period of 3,6 months (e.g. contributions that goes to his commission/administration). Following the 5 year plan I can repeat the same plan again and again, rather than locking in for a really long time. He explained to me that the products that the brokers deal with in this region are designed this way, hence he would happily suggest a plan without a lock-in period if he had the option. At least a 5 year plan would attract substacially less early-exit charges if I decided to lapse the plan or was forced to stop the payments in comparison to a 15, 20, or 25 years plan.

The money gets invested in mutual funds (medium risk, since that's what we agreed that I could tolerate) and not in mirror funds which apparently takes out higher charges.

He showed me a 10 years history of their medium risk portfolio performance which has been somewhat shaky the past 5 years (although on the plus side net of charges).

Also, something called bid/offer spread applies, e.g. a %-charge taken out from Generali in case of switching funds.

As an alternative he did provide a contact to a Swedish guy (in Sweden), working for a large financial institute who can provide endowment insurance without a lock-in period to which I can contribute tax-free, given that I can forsee that I remain outside of Sweden for a minimum of five years (three more to go ).

- Life, Critical Illness, and Permanent Total Disability Insurance: Term insurance with a term of 26 years with Zurich International Life.

The amount insured is basically our mortgage for our house in Sweden + five years of my current salary (to be revised yearly).

His reasoning is that it allows my wife (housewife) and my children to keep the house and provides time enough for my wife to grief and to educate herself before returning to a working life.

The reason to put a 26 year term is that I reach my desired retirement age at that point and I am guaranteed to be insured for the full period, regardless if I develop any deceases of any sort. However, if I want to lapse the plan I can do so at any point by just stop paying the premium. The premium is averaged out over the term so it is fixed for the full term, hence I don't have to pay more the older I become.

In regards of the insurance, Swedish companies won't provide coverage for Swedes that reside outside of Sweden.
____________________

Now, my thoughts is to take out the insurance and compare the charges taken out by the Swedish company before taking a decision in regards of my pension.

I'm well aware of that I'm acting against the advice given but I don't feel this is a rip-off guy based on the suggested solution + I really don't feel that I can do this myself without having to eliminate loads of precious time with my family.

Again, does anyone have any input that would make me to change my mind?

Many thanks guys!
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Old 18th Mar 2013, 11:48
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Well, if nothing else you will have made your advisor's Porsche payments for the foreseeable future. That should make you feel good.

You may want to copyright the body of your text as it would make an excellent "how to sabotage your entire financial future" primer.
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Old 18th Mar 2013, 12:18
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What Dropp said.
Times two.

Don't you think you should know what "something called a bid-offer spread" is before you put your money into it? And how big the spread is?

Is a portfolio with a "somewhat shaky performance" for the last five years really somewhere you want to put your money?

Why on earth would anybody want to lock themselves into a five year savings plan where they have to put money in every month even if they are off work or ill? Of course the brokers love products like that- they pay the best commission!

If you think financial planning for your and your family's future is too difficult and takes up too much time to the extent you would rather get somebody else to do then you will get robbed. These are professional sales people who do this all day everyday. You are a lamb to the slaughter.

I despair.
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Old 18th Mar 2013, 12:23
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Spot on BG.
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Old 18th Mar 2013, 13:02
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Hi--the 'sell' of the 5 year plan is exactly that--a sell. They say, OK don't lock in long tern, just 5 years.

ANY product that locks you in is undesirable. You can do better, with less risk with almost any European brokerage.
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Old 18th Mar 2013, 14:39
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Honestly stay far far away from any of that lock in crap. The ONLY reason that exists is to enrichen the brokers providing the "service". They are looking after their financial future not yours.

If you really don't want to put the time or effort in, buy a basket of 4-5 ETF's with low fees such as Vanguard tracking in equal portions, Global Stocks, American Stocks, Short Term Bonds (avoid the longer term bonds at the moment) and either commodities or gold. If you want some more exposure to your home area, allocate a smaller portion to a European ETF as well, (smaller in that you will already have EU exposure in the World Market ETF.)

All the appropriate tickers can be found on Vanguards website or a brief search through the net. You should be able to open a low cost discount brokerage that charges either no or very small commisions to trade ETF's. Interactive Brokers is a good one with worldwide exposure if you need somewhere to start.

Rebalance these to the initial percentage once a year, the rest of the time walk away and go drink beers on the beach. I will bet you a month's salary that you will have outperformed the so called financial adviser in Dubai at the end of 10 years. If you don't believe it ask him to provide you with a comparison of how your money would have performed in a low/no cost ETF basket strategy vs his managed fund that steals months of contributions in commissions.

Hell pay me one months salary and i'll walk you through step by step on how to set it up and what to buy. If you're smart enough to fly an aircraft you can do your own investing in a ETF basket...it's pretty simple. The discipline comes from not messing with it and not trying to time the market.

You're better off putting all your money in a Cypriot bank at the moment than giving it to the companies in Dubai to manage.

Go buy Trader a beer or two to help along his expanding middle section. He's got a financial advisor background as well and can steer you in the right direction with no other motive than your best interests and getting a free beer or two at least he can give you some unbiased advice face to face.

Last edited by tbaylx; 18th Mar 2013 at 15:24.
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Old 18th Mar 2013, 15:09
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Don't hand your hard earned money to this guy! 5 yr is not long term for you? What is?
If your EK, put it in the C fund, at least there are no entry/early exit fees.
TD direct investing, (ex Internaxx), will offer you more funds (funds of the month have their fees waived), cheap transaction fees on shares and 10-12 markets to invest on (including Stockholm). You don't have to trade all the time, stick to simple stuff like Coke.
If you really want to let go of your money, we can meet!
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Old 18th Mar 2013, 18:11
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As I said before, I really appreciate that all of you take your time to answer my long posts!

Me and my wife have taken the decision not to do this ourself and rather pay the fee to let someone that we feel that we can trust to do it (yes, even if the guy can pay a month or two of the installments on his Volvo V70 - not Porsche). With that said I think some of you missed out on the part where I wrote that I contacted the guy based in Sweden as well (with no lock-in period) to see what he recommends in regards of my pension.

Also, to be honest - and I think anyone with a wife can relate to this - if you do the investments yourself and another economic crisis hits us, who do you think your wife will bust the balls off?

There are also stories where people who makes their own investments loose loads of money. One example of this is a friend of my mother in law who bought Ericsson stocks (one of the major telecom companies in the world) for a really long period of time (more than 20 years). A couple of years ago when his retirement was getting closer the stocks went from about 220 SEK (125 AED) to 3 SEK (1,71 AED). He lost about 3 million SEK and luckily he had invested elsewhere as well.. But such horrifying story is the "other side of the coin".

I think BigGeordie wrote something good in his first post;

"Take advice from as many people as you like but make an informed decision based on what you know not what they tell you. Never, ever buy a financial product you don't understand completely."

Thanks a lot for all you're input!!
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Old 19th Mar 2013, 00:47
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I think a lot of this is psychology. People are so terrified of making a wrong decision they would rather make no decision at all and instead get an "expert" to do it for them. They will then continue to trust said "expert" because to do otherwise would make them face up to the fact that they should never have listened to him in the first place! Financial salesmen know this- they wouldn't be very good salesmen if they didn't know a little bit about how the human mind works.

Our Swedish friend is terrified what his wife might think if he makes an investment decision and it turns out to be wrong. (I'm sure salesmen are very good at playing this up as well.) Some of the investment decisions you make will be wrong but that applies to your financial salesman friend as well. And, SwedenInDubai, if I was your wife I would be busting your balls now for abdicating all responsibility for your family's financial future to somebody you have only just met. Even if he does do a good Powerpoint presentation!

Anyway, whatever you decide to do, good luck, but don't say we didn't warn you!
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Old 19th Mar 2013, 04:32
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The only person that really cares about your money is >> YOU .

Been there , done it , tried them all. in the end. Self Financial Management is the best option.

On that note, If your considering using TD for example you have to set up an account in an offshore place like Luxembourg ( assuming your a non resident in your home country ) . Otherwise you will have tax / legal issues. You need to be a resident in the country your account is held.

You will pay more for the trades Ie €20/30 +, compared to E-Trades's $9.99, but you stay legal.

The only financial product Id consider is life insurance, but then again there are so many "if's" "and's""butt's", that i'm suspicious of what actual settlement would be paid, if any.

However, if anyone has a life insurance / income protection plan that they feel is worth of a look, pls post the details.

Last edited by neilb767; 19th Mar 2013 at 05:19.
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Old 19th Mar 2013, 05:57
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Check Kiplinger's April issue. (Available on the news stand on Ipad). They give a list of their recommended ETF's and mutual funds.
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Old 19th Mar 2013, 06:55
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I would have said his advice on life insurance is sound. It's just a question of are you able to find a better deal on the web. Insurance is so competitive these days.

The Generali fund he is selling sounds like their Vision product. I have had a look at it. The TER is about 1.2% a year, if I remember correctly you commit to 6 months payments for the 5 year plan, you can stop after that with no penalties except your 'bonus' is less at the end. There is a wide selection of funds to choose from. Regular payments also help avoid market timing issues with the pound (krona) cost averaging effect.

From a UK tax point of view it has some benefits, tax deferral by way of 5% capital drawdown as tax free income a year for 20 years. Also if you die named beneficiaries get the cash without the long drawn out process of probate.

There is a cost to most things in life, end of the day the financial adviser is just trying to earn a crust. Caveat emptor, you are just going to have to take the time to figure it out, start with Googling bid offer spread.
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