Global Eye / PIC / DeVere / Acuma et al - Zurich Vista UAE
Join Date: Jul 2010
Location: earth
Age: 59
Posts: 59
Likes: 0
Received 0 Likes
on
0 Posts
"(most can't beat the market, and it is impossible to know which ones will)"
And for sure. These scams will never.
Let see. You will pay 1.5% quarterly as a fee on your first 18 monthly payments until the end of your plan.
So that means you will pay 6% as fees per year plus 1.2% of all your investment per year.
Of course, it's not only that. The fund you have chosen or your "financial adviser" has fees. On average 1.8% per year. And last but not least, more US$ 6 monthly.
Let's assume that you or your "financial adviser" have chosen 3 funds
You will pay roughly 9% in fees even if the market is plunging.
The S&P 500 return is approximately 10% year since its inception back in 1928. Adjusted for inflation the real return is more like 7%.
And for sure. These scams will never.
Let see. You will pay 1.5% quarterly as a fee on your first 18 monthly payments until the end of your plan.
So that means you will pay 6% as fees per year plus 1.2% of all your investment per year.
Of course, it's not only that. The fund you have chosen or your "financial adviser" has fees. On average 1.8% per year. And last but not least, more US$ 6 monthly.
Let's assume that you or your "financial adviser" have chosen 3 funds
You will pay roughly 9% in fees even if the market is plunging.
The S&P 500 return is approximately 10% year since its inception back in 1928. Adjusted for inflation the real return is more like 7%.
Join Date: Mar 2016
Location: Kuwait
Posts: 67
Likes: 0
Received 0 Likes
on
0 Posts
All correct - but I think it understates the costs!
The disclosed fees of the underlying funds are often much higher than 1.8%, more like 2.5%. Advisers tend to promote higher cost funds, presumably because they get a kick-back from the fund manager.
On top of that the funds are allowed to pay some costs (e.g. audit fees) that are not disclosed. The general consensus is that these add a further 0.5%.
Also, if you have a regular savings plan you are often encouraged to pay from your credit card account. The plan provider will normally charge an additional 1% for this.
Finally, just be clear about the first 18 months, the advisers and the prompters go out of their way to obscure and complicate what is happening, but it is really quite simple. The whole of your contributions for the first 18 months is paid to the adviser, upfront, as commission.
So if you buy a plan saving $1,000 a month for 25 years the value of that plan after 19 months is $1,000. You will get a statement telling you that it is $19,000, but the encashment value, which is the real value, will be just $1,000.
You get the $18,000 added back into your investment pot if you hold the plan to maturity. Approximately 5% of 25 year plans are held to maturity.
The disclosed fees of the underlying funds are often much higher than 1.8%, more like 2.5%. Advisers tend to promote higher cost funds, presumably because they get a kick-back from the fund manager.
On top of that the funds are allowed to pay some costs (e.g. audit fees) that are not disclosed. The general consensus is that these add a further 0.5%.
Also, if you have a regular savings plan you are often encouraged to pay from your credit card account. The plan provider will normally charge an additional 1% for this.
Finally, just be clear about the first 18 months, the advisers and the prompters go out of their way to obscure and complicate what is happening, but it is really quite simple. The whole of your contributions for the first 18 months is paid to the adviser, upfront, as commission.
So if you buy a plan saving $1,000 a month for 25 years the value of that plan after 19 months is $1,000. You will get a statement telling you that it is $19,000, but the encashment value, which is the real value, will be just $1,000.
You get the $18,000 added back into your investment pot if you hold the plan to maturity. Approximately 5% of 25 year plans are held to maturity.
Join Date: Mar 2007
Location: EU
Posts: 10
Likes: 0
Received 0 Likes
on
0 Posts
Hey guys,
Friend of mine has the Vista policy, he's in it 3 years (25yr term) with around €43,000 invested (of which €7500 is the bonus)
Here is his plan.
Suspend account (max 3 years)
Take a partial surrender (approx €14k) (remaining balance 43-14k = €29k)
Every 3 years, reactive account with min instalment €50, then suspend again for 3 years.
Continue to do this until Term ends.
Effectively when term is reached, you can get the remaining €29k.
So far the account is suspended 9 months, and lost no money, as the funds is making enough to pay off the fees, in some cases it makes over €1k in one month, so as long as this continues,...it could work, right???
Thoughts guys, anyone have other ideas?
Or just do a Full Surrender?
Thanks.
Friend of mine has the Vista policy, he's in it 3 years (25yr term) with around €43,000 invested (of which €7500 is the bonus)
Here is his plan.
Suspend account (max 3 years)
Take a partial surrender (approx €14k) (remaining balance 43-14k = €29k)
Every 3 years, reactive account with min instalment €50, then suspend again for 3 years.
Continue to do this until Term ends.
Effectively when term is reached, you can get the remaining €29k.
So far the account is suspended 9 months, and lost no money, as the funds is making enough to pay off the fees, in some cases it makes over €1k in one month, so as long as this continues,...it could work, right???
Thoughts guys, anyone have other ideas?
Or just do a Full Surrender?
Thanks.
Join Date: Mar 2016
Location: Kuwait
Posts: 67
Likes: 0
Received 0 Likes
on
0 Posts
Your friend's plan is a really bad plan, based either on poor advice, or poor product knowledge.
Cash in the plan and walk away - chalk it up to experience, unless your friend is in a jurisdiction that is properly regulated, in which case complain!
Cash in the plan and walk away - chalk it up to experience, unless your friend is in a jurisdiction that is properly regulated, in which case complain!
Gentleman Aviator
Join Date: Jun 2003
Location: Dubai
Posts: 46
Likes: 0
Received 0 Likes
on
0 Posts
The major flaw in the plan is the assumption that it continues to make €1000 per month. The fund is doing well because global stock markets are doing well. As soon as the market starts to fall (ignore what the commentators say, stock market bull runs always end eventually) the fund will start to lose money and your friend will still be paying the fees. I suggest that you take the full surrender and move on viewing it as an expensive education in money management.
Join Date: Mar 2016
Location: Kuwait
Posts: 67
Likes: 0
Received 0 Likes
on
0 Posts
Sorry to disagree with you, but you couldn't be more wrong.
The major flaw with these plans is not the BS returns that you are promised. The major flaw is what you are not told, which is the level of commissions and charges, and the impact that this will have.
The level of these charges are so high that there is no possibility that your plan can keep up with markets.
If you save $1000 per month into a passive investing fund for 25 years you can expect 7% per annum over the long-term, giving a maturity value of $820,500.
But if you buy one of these policies, with annual fees of 6.5%, the value of a similarly invested portfolio will be $320,500.
In other words, the true cost of the advice to buy this policy was $500,000!
Now the adviser doesn't get $500,000, but that is the true cost of their advice to you.
The major flaw with these plans is not the BS returns that you are promised. The major flaw is what you are not told, which is the level of commissions and charges, and the impact that this will have.
The level of these charges are so high that there is no possibility that your plan can keep up with markets.
If you save $1000 per month into a passive investing fund for 25 years you can expect 7% per annum over the long-term, giving a maturity value of $820,500.
But if you buy one of these policies, with annual fees of 6.5%, the value of a similarly invested portfolio will be $320,500.
In other words, the true cost of the advice to buy this policy was $500,000!
Now the adviser doesn't get $500,000, but that is the true cost of their advice to you.
Join Date: Dec 2017
Location: Anz
Posts: 132
Likes: 0
Received 0 Likes
on
0 Posts
Hi guys,
I'm another one of those who fell into their hands due to poor knowledge of the system and the dogma that when You are in the ME You "must have a pension scheme".
After 3.5 years of UAE and PIC treatment I have relocated back to the good old Continent. I have suspended my payments since then, that is for 1.5 years now on a 25 years plan. I have an advisor in my country who is pushing me to restart the payments (obviously) but my idea is to get out of it being aware of the huge penalty that I will have to face. I feel sick thinking about the penalty of the full surrender value but I think that if I keep going with that plan for all the reasons mentioned by all the knowledgeable posters above it will be even worst. Any thoughts ? Treat it like an expensive finance education course as wisely stated above ?
Thanks !
I'm another one of those who fell into their hands due to poor knowledge of the system and the dogma that when You are in the ME You "must have a pension scheme".
After 3.5 years of UAE and PIC treatment I have relocated back to the good old Continent. I have suspended my payments since then, that is for 1.5 years now on a 25 years plan. I have an advisor in my country who is pushing me to restart the payments (obviously) but my idea is to get out of it being aware of the huge penalty that I will have to face. I feel sick thinking about the penalty of the full surrender value but I think that if I keep going with that plan for all the reasons mentioned by all the knowledgeable posters above it will be even worst. Any thoughts ? Treat it like an expensive finance education course as wisely stated above ?
Thanks !
Thread Starter
Join Date: Jul 2013
Location: Cutting grass on more unpaid leave
Age: 44
Posts: 141
Likes: 0
Received 0 Likes
on
0 Posts
You will get some of the funds back at 3.5 years, but obviously your pot will have shrunk with all the fees and charges still being applied whilst you froze payments.
I was told you need to make 10 full years of payments just to break even on the fees and charges and for the fund to grow thereafter.
If you had been making large contributions in the UAE which you can no longer afford to make back home and you reduce your monthly payments, all fees are still charged at the higher contribution rate. Your fund cannot grow and you are just servicing more losses. This might be the deal breaker for you to consider?
I was told you need to make 10 full years of payments just to break even on the fees and charges and for the fund to grow thereafter.
If you had been making large contributions in the UAE which you can no longer afford to make back home and you reduce your monthly payments, all fees are still charged at the higher contribution rate. Your fund cannot grow and you are just servicing more losses. This might be the deal breaker for you to consider?
Join Date: Mar 2016
Location: Kuwait
Posts: 67
Likes: 0
Received 0 Likes
on
0 Posts
That post makes no sense. Financial firms do not employ fiduciaries, rather the firm itself may, or may not, have a fiduciary duty to its clients.
Are you a shill?
Regarding AES, their website says that "AES Middle East Insurance Broker LLC is regulated by the UAE Insurance Authority, licence no. 189":
https://www.aesinternational.com/leg...nd-regulations
So they appear to sell the same insurance-based, unit-linked, toxic savings plans that everyone else is selling to the gullible.
Are you a shill?
Regarding AES, their website says that "AES Middle East Insurance Broker LLC is regulated by the UAE Insurance Authority, licence no. 189":
https://www.aesinternational.com/leg...nd-regulations
So they appear to sell the same insurance-based, unit-linked, toxic savings plans that everyone else is selling to the gullible.
Join Date: Apr 2009
Location: abroad
Posts: 63
Likes: 0
Received 0 Likes
on
0 Posts
Probably worth a visit or a read of his book before you commit to anything with one of these advisors.
https://www.thenational.ae/business/...althy-1.695214
https://www.thenational.ae/business/...althy-1.695214
Join Date: Aug 1998
Location: the ridge where the west commences
Posts: 770
Likes: 0
Received 0 Likes
on
0 Posts
The book is absolutely top notch and has an appendix which adds advice specific to your home country's tax regime to help you avail of all your advantages whilst you are an expat.
Follow his very simple advice and you will return home at least $250,000 richer than your EK colleague who lets his money be incrementally robbed from him in the C fund.
Before you type your nay-sayer's response be aware that Hallam only offers his very astute advice and is trying to sell you nothing but his book.
Follow his very simple advice and you will return home at least $250,000 richer than your EK colleague who lets his money be incrementally robbed from him in the C fund.
Before you type your nay-sayer's response be aware that Hallam only offers his very astute advice and is trying to sell you nothing but his book.
Join Date: Jun 2005
Location: MIDDLE EAST
Posts: 1,035
Likes: 0
Received 0 Likes
on
0 Posts
Dropp
With all due respect, it's not that type of fund that should be avoided. In fact, if you read his advise, the C fund type investments are not his target. Sure, managed funds take charges and these should not be ignored, even if they are discounted as in the PF. Over time, the % fees charged by fund managers add up. Statistically, you're probably better off investing in a simple low fee tracker fund.
However, It's the likes of DeVere, Globaleye etc with their locked in policies and massive hidden up front charges that really screw people and it's these that need avoiding.
With all due respect, it's not that type of fund that should be avoided. In fact, if you read his advise, the C fund type investments are not his target. Sure, managed funds take charges and these should not be ignored, even if they are discounted as in the PF. Over time, the % fees charged by fund managers add up. Statistically, you're probably better off investing in a simple low fee tracker fund.
However, It's the likes of DeVere, Globaleye etc with their locked in policies and massive hidden up front charges that really screw people and it's these that need avoiding.
Join Date: Aug 1998
Location: the ridge where the west commences
Posts: 770
Likes: 0
Received 0 Likes
on
0 Posts
Join Date: Jun 2005
Location: MIDDLE EAST
Posts: 1,035
Likes: 0
Received 0 Likes
on
0 Posts
Not disagreeing with the obvious Dropp. Think you may have sent a similar link before!
A friend of mine has actually met this individual and says that his lifestyle is fairly frugal. To him, it's all about surviving on the minimum and not 'wasting' a single cent that could otherwise be invested! Fine in itself, but you end up living your whole life centred entirely around saving and never get to enjoy the benefits of your ever increasing wealth.
Life is about balance, as are investments. This guy invests in equities and bonds. Nothing else.
A friend of mine has actually met this individual and says that his lifestyle is fairly frugal. To him, it's all about surviving on the minimum and not 'wasting' a single cent that could otherwise be invested! Fine in itself, but you end up living your whole life centred entirely around saving and never get to enjoy the benefits of your ever increasing wealth.
Life is about balance, as are investments. This guy invests in equities and bonds. Nothing else.
Join Date: Jan 2006
Location: Fatigue Recovery Clinic
Posts: 78
Likes: 0
Received 0 Likes
on
0 Posts
Dropp, I do agree with you, Vanguard funds and their associated ETFs have the lowest expense ratio in the market, some ETFs like VOO and VTI are as low as 0.04%. However Vanguard does not allow you to open an account with them if you're a UAE resident, same with most brokers in US. I was trading my ETFs with DeGiro in Europe but now new european regs don't allow you to trade funds where their prospectus are in a different language. Most of trackers such as SP500 or FTSE and SPY have english prospectus and can't be traded in Europe anymore. I'm running out of options. "C" account is what I have left even though I know it's quite expensive as most of mutual funds. You can still use Swissquote and Saxo platforms but that will cost a leg and two arms every time you trade.
Join Date: Jan 2018
Location: Mexico
Posts: 80
Likes: 0
Received 0 Likes
on
0 Posts
I had no problem opening US trading accounts with Interactive Brokers whilst I was in Dubai for myself and my wife. The only issue if you are investing in US stocks and funds is that the US has no tax treaty with the UAE so all Dividends are subject to 30% Withholding Tax. I also opened an account with OptionsXpress who are now Schwab.
For European markets I had a trading account with TD Waterhouse in Luxembourg (I think they used to be Internax) but I would hesitate to recommend them.
For European markets I had a trading account with TD Waterhouse in Luxembourg (I think they used to be Internax) but I would hesitate to recommend them.
