I have given a range of reviews on bonds and portfolios. With most of the offshore bonds, it can be expensive.
The Old Mutual International (OMI) Executive Bond offers a range of commission set-ups and it is vital to understand this, as one adviser may charge far less than another adviser for what appears an identical product but is not.
However, like many bond based platforms Old Mutual International (OMI) Executive Bond lacks flexibility and access when compared to a pure platform custodian. If you are considering an Old Mutual International (OMI) Executive Bond then ensure you fully understand the local taxation position and weigh any benefits against its lack of flexibility, access, and charges which are often not explained.
The type of funds available is also down to the adviser as to whether they are “cheap” or “expensive” versions which relate to what the adviser is seeking to
earn.
Here are real examples of fees and charges executive professionals are paying for the EIB from Old Mutual International:
- 5-year charging structure
- 8-year charging structure
- 10-year charging structure
Establishment charge
One-off charge taken in year one only, quarterly in arrears in all payments structures
Regular management charge
1.80% per annum for 5 years reducing to 0.2% thereafter, based on the premium (which equates to 9% of your money taken over 5 years, and then 0.2% thereafter for the lifetime of the bond) Note, this charge is also levied against every top-up you make
1.175% per annum for 8 years reducing to 0.2% thereafter, based on the premium (which equates to 9.4% of your money taken over 8 years, and then 0.2% thereafter for the lifetime of the bond) Note, this charge is also levied against every top-up you make.
0.950% per annum for 10 years reducing to 0.2% thereafter, based on the premium (which equates to 9.5% of your money taken in 10 years, and then 0.2% thereafter for the lifetime of the bond) Note, this charge is also levied against every top-up you make
An administration charge (subject to annual review)
£100 per quarter every quarter – for the lifetime of the bond
Dealing charge (applied to every single sale or purchase of a fund or asset and placement and renewal of fixed deposits)
£15 a time (subject to annual review)
Currency dealing charge
OMI reserves the right to change this and review it annually
Early withdrawal charge
- 9.00% in the first quarter, reducing by 0.45% per quarter to 0% after 5 years
- 9.40% in the first quarter, reducing by 0.29375% per quarter to 0% after 8 years.
- 9.50% in the first quarter, reducing by 0.2375% per quarter to 0% after 10 years.
Ongoing service charge (also known as trail commission)
Decided by your adviser. This percentage charge is taken proportionately each calendar quarter in arrears. Where it is levied it is typically between 0.5% and 1% per annum
Other charges
Investors are asked to sign to confirm agreement with this statement:
I understand and accept that other charges may apply to my account. These charges may be made by third parties, for example, an annual management charge on a selected fund or by Old Mutual International for additional services I request.
Here are some reviews of people that have purchased:
My husband invested over 137,000 pounds into one of these OMI Executive Bonds just over 4 years ago, it is now worth only 27K. Despite being a pension fund, an unlicensed, unregulated IFA operating from Spain used photocopied fraudulent dealing instructions without our knowledge and purchased extremely high-risk investments totally unsuitable for a long term pension investment despite the risk chosen being low/medium as a pension fund should be, OMI just allowed this to happen.
We are currently in the process of a formal complaint procedure against OMI, who I might add are not taking any responsibility whatsoever and are just passing the buck, back to our Trustee Momentum Pensions Malta Ltd (who we are also complaining to). The fact that both OMI and Momentum Pensions Malta Ltd allowed an unlicensed unqualified IFA to purchase these investments without our knowledge and just sat back and watched our funds disappear is quite incredible. We have paid 19K out in charges alone via OMI, they are still taking a yearly fee based on the original investment value, they will not waver their exit fee to allow us to move to a different company.
I am part of a group of 266 disadvantaged investors who between us have lost almost 16 million. We wish we had never heard of QROPS. OMI have made a lot of money out of us, and my friends in our group, we have lost a fortune …. OMI have made a mint!
They are disgraceful. Avoid at all costs!
Summary
If you want to talk to me about bonds, if you are invested in them or want some general advice, please email me at info@investmentsforexpats.com
