Before I go into the nitty-gritty of offshore bonds, its charges, savings plans, management fees, and commissions, I want to highlight that this is a REAL case that came to me. These are REAL numbers and I have taken all personal information out. I have not fabricated this for a fake example!
Many expats are now faced with decisions like these to see if they can escape these plans because they were sold on different aspects but now come over to see the amount which is being charged to their account and the performance of their account. Not to mention what the ‘advisor’ got paid for putting them in a 20-year savings plan…
Why you should stay away from offshore bonds and saving plans (for most people).
Here is a breakdown of the fees of RL360 PIMS and the saving plan for their specific situation. Note that the PIMS is only on 3% initial commission and it can be as high as 1% a year which equates to 7% upfront commission.
This is a great illustration as it shows 24% of the contribution on the RL360 saving plan (with an IFA fee) and 16% on just 3% commission and 0.75% IFA fee on RL360 PIMs is going on fees (the fee can be higher as suggested if it’s on the higher commission plan of 7% upfront commission equating to 1% of the policy over 10 years).
Of course, this will be different depending on the structure. But, it’s just a comparison of how much fees you are paying on these plans and why it is normally best to stick to low-cost platforms such as Saxo at 0.12% which is fully flexible and fees based. Rather than these offshore bonds/ saving plans that are usually pushed by salespeople for commission.
At IFE we are only Saxo Bank and Novia Global both fee-based FCA-regulated platforms.
And would highly recommend anyone that who has these plans get a review from a fee-based advisor.
If you have any questions please feel free to contact me using the button below and I can arrange a time to call if it is required.
Conclusion
In case you didn’t know, this was a real case that came into my inbox. This is what I deal with a lot and why I write so much about these types of investments.
If you are in one and want me to review your situation, please contact me using the button at the bottom of the page!
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