“We’ve just been scammed by Friends Provident, so what now?”


I received the headlined quote in an email from a 35 year old American couple that bought an Investment Linked Assurance Scheme through Friends Provident.   

zurich warningBut was the couple really scammed?  Investors need to read the fine print behind any investment scheme. This particular product labels itself as an “investment” insurance policy, promising 101% of what an investor deposits, upon their death.

Of course, that sounds good.  But think about it for a moment.

The company promises 1% more than what you deposited or the market value of the investments upon death, whichever is highest.  I’ve taken this directly from the Friends Provident website:

“In the event of the death of the Life Assured (or the last surviving Life Assured if the policy is written on more than one life) while the policy is in force, 101% of the cash-in value of your plan will be payable.” … read the product summary

Fees charged to investors are high, but much can be found in the prospectus:

  1. 1.2% annual administration charge
  2. 1.6% annual establishment charge (for the first 5 years)
  3. 2.59% expense ratio (See Average Channel Island  Fund fees on page 1287, in the article by Henri Servaes, Ajay Khorana and Peter Tufano, called “ Mutual Fund Fees Around the World”: … read the article.)

Assuming that they have already paid the bulk of their annual establishment fees (charging 1.6 percent annually for the first five years) they will pay combined investment fees of roughly 3.79 percent annually, when adding up the annual administrative charge with the annual expense ratio for the funds.

This couple, after reading one of my earlier posts on Friends Provident, wanted to take action, by selling their investments, and reinvesting with a company that won’t drag them over the coals.  But Friends Provident paid their advisor a large upfront commission.  To recoup that money, the company needs to keep this couple in their product, so they can reap perpetual fees from their clients.

My new online friends have a dilemma:  Their investments have a market value of $150,000 U.S., but if they withdraw their money now, they’ll pay a penalty of $45,000 to Friends Provident, while receiving just $105,000. 

Should they do it?

As Americans, with Vanguard’s indexes, they could pay as little as 0.15 percent for a diversified portfolio.  With Friends Provident, they’re paying roughly 3.79 percent in annual fees.

Let’s have a look at what those fees could do to the 35 year old couple, over the next 30 years.  Assuming a stock/bond market return of 9 percent annually, they would make 8.85 percent annually with Vanguard, and 5.31 percent annually with Friends Provident.

Let’s have a look at what would happen if they pulled their money out, taking that $45,000 hit, and then investing with Vanguard.

Investment Company


Annual return over 30 years

End value in 2041





Friends Provident




 You can see, above, that despite taking that $45,000 hit, the comparative results with a low cost company like Vanguard would easily outstrip the results of a high-cost company like Friends Provident.  The decision, of course, is up to them.  But they need to be aware of the fact that according to Nobel Prize winner William Sharpe, fund investments (on aggregate) earn the markets return, before fees.  Over time, they will under-perform the market in direct proporation to the fees charged.

But these new friends of mine have an option:  they’ve told me that they can withdraw as much as $90,000 today, without a paying a fee.  And later, they can withdraw more money, paying a lower penalty as more time elapses.

If they want to pay lower fees, they could invest that $90,000 with Vanguard or Assetbuilder, and concentrate on building those accounts, while limiting their losses with the money they leave behind, with Friends Provident.

Unfortunately, from what I understand, they will have to keep contributing money to Friends Provident, based on the contract they have signed (bizarre, I know!) but the pain of selling their money later is abated, as the penalty to sell “early” isn’t as severe later on.

Expatriates often invest without reading the fine print on a prospectus.  Here are some rules to invest by:

  1. You should never pay a fee to either buy or sell your investments (with the exception of a small fee to buy exchange traded index funds.
  2. You should never have to pay a penalty to withdraw your money
  3. You should never have to pay an ongoing administrative charge (or an “establishment charge” as Friends Provident coins it)

You should also teach your friends not to fall for costly schemes that can cost them hundreds of thousands of dollars over their lifetimes.

Further Reading:

 Costs in the Mists of Time: South China Morning Post

Royal Skandia’s high commissioned Investment Linked Assurance Schemes are similar to those sold by Friends Provident and Zurich International

 Hong Kong Consumers Angry After Being Sold Complex Insurance Product ILAS:  South China Morning Post

 ILAS Products Under Scrutiny:  International Advisor

 The Real Cost of an Offshore Pension Plan:  Noto Financial Planning

Tony Noto once sold  ILAS products (much like Zurich and Friends Provident’s) until he recognized how much they took from investors.  In this article, he explains how they work.





andrew hallam

andrew hallam

I'm a freelance finance writer, lucky enough to have been nominated as a finalist for two Canadian National Publishing Awards. I'm also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School, a book explaining how I became a millionaire on a teacher's salary, while still in my 30s. Working to empower people financially, I'm available to motivate and inspire people on basic retirement planning and index investing. I'm happy to comment on your questions, first, please read the Terms of Use.

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190 Responses

  1. DIY Investor says:

    Woodie Guthrie wrote it down in song years ago:

    "Yes, as through this world I've wandered

    I've seen lots of funny men;

    Some will rob you with a six-gun,

    And some with a fountain pen. "

  2. CreditDonkey says:

    So unfair. Poor fellows who have fallen to these scammers. Sometimes the desire to earn money can just end up in losing money – lesson learned the hard way :(

  3. Paul Carey says:

    Can you please tell me if this is Friends Provident in the Isle of Man?

  4. David says:

    As a Canadian living overseas will I benefit from investing in an 'off-shore' program like Royal London 360 vs. Vanguard where I will have to pay US taxes on my money?

    • Hi David,

      I don't know exactly where you are living, but as an non-American, you can't invest directly with Vanguard. You can, however, open an account of exchange traded funds at a brokerage. If you open an account in a country that doesn't charge capital gains, you're free and clear of paying capital gain taxes. You don't have to live in the country either. People in Vietnam (Canadians) are flying to Singapore to open accounts, then building their portfolio of exchange traded index funds from there. Wiring the money each quarter might cost a little, and it's not convenient, but overall, you will pay far lower fees with this option, than with the service company you are using.

      Also, even with your offshore investment company, you are paying U.S withholding taxes on the dividends, if any of their products have exposure to the U.S market. There's no way around that. Where do you live/work? I may be able to offer a suggestion.



  5. David says:

    Andrew – I live/work in KL and we have some mutual friends through SAS. I am seriously considering closing my IPP account and cutting my losses. This is a big step and I want to make sure I am making the right choice before I do it. I need a place to start investing once I give up my Royal London 360 account. Any advice?

  6. David says:

    I failed to mention that my wife is a US citizen and we have funds in the US with Fidelity.

  7. bill says:

    David, please share your experiences with IPP and Royal London. I have also invested with them but over 8 months. What are your reservations?

  8. Gary Crock says:

    I have an account with them with these fees.. However, they match 125% of the money we put in..

    The program is called Premier Plus and the wording is:

    ""if you invest $2k per month for 10 years, you will qualify for the current Premier Plus Special Offer – Your Initial Unit Bonus Allocation will be: 125%

    This means that for the first 18 months, for every $2k you invest, there will be a $2500 USD working to buy units in your chosen investments..""

    I have to leave it in for 18 months, but then I can take out anytime.. How safe is this money ? I know they have AAA rating and Life Assurance Regulations of the ISle of Mann (1991)..

    is this a good deal??

  9. Gary says:

    I have an account with them with these fees – Premier PLUS.. However, they match 125% of the money we put in..

    The program is called Premier Plus and the wording is:

    ""if you invest 2k per month for 10 years, you will qualify for the current

    Premier Plus Special Offer – Your Initial Unit Bonus Allocation will be:


    This means that for the first 18 months, for every 2k you invest, there

    will be a 2500 USD working to buy units in your chosen investments..""

    I have to leave it in for 18 months, but then I can take out anytime.. How safe is this money ? I know they have AAA rating and Life Assurance

    Regulations of the ISle of Mann (1991)..

    But is this a safe and good deal??

    • Gary,

      First of all, it's a 25% bonus that they're talking about. Giving you 100% of what you deposit means you are getting 0%. Getting 125% of what you deposit means you are getting 25%. But look very carefully at the contract. You must deposit money over 10 years, yes, but do you get this 25% bonus after ten years? Or after many other years?

      If you get the bonus after depositing for 10 years and you're keeping the account for 25 years, the "bonus" amounts to less than 1% annually.

      You will pay triple that, annually, in fees. Dissect that contract very very carefully. It's not as transparent as it appears, and it looks much better than it is.

  10. David,

    If you learn about exchange traded funds, you may be able to open a DBS Vickers account in Singapore and use exchange traded index funds, just as I do. True, living in KL makes it less convenient, and you would have to open the account in person (then wire the money) but it's the most efficient way for you to invest. If you check the "expat investing" tab at the top of the page, you should be able to find some useful information.

  11. Andrew Rowan says:

    With regards to the 18 month initial allocation period of the Friends Provident Premier; As I understand it you pay your monthly premium for 18months and it remains in the plan for the term i.e. 10 years. The bonus of say 25% is added to your premium thus buying 25% more units in the chosen investment and again this stays in the plan for the term.

    So ok you pay the fees etc and doing the math you're returning whatever % less the fees right?

    My question is as a lazy investor; If I'm making say 8% p.a. in the product less the 3.69% above means i'm returning 4.31%p.a.? Where 'should' I be investing my money (as a lazy investor) to forget about it for the term that will return me this %?

    As an expat I speak to numerous people, some opt to leave it in a bank account with little to no return others speak of Generali, Skandia etc but surely these are all much a muchness as fees go?

    • Hi Andrew,

      I have some options mentioned under my "Expat Investing" icon at the top of my home page. My total investment expenses average roughly 0.15 percent per year. I use DBS Vickers' online brokerage, and I purchase three exchange traded funds: Vanguard's International stock market index (VEA); Vanguard's total U.S. stock market index (VTI) and a short term Canadian stock market index (XSB.TO)

      I don't pay capital gains taxes on the profits. The dividend yield is low, and I do pay a 30% witholding tax on the dividends. But even in a tax sheltered account with Zurich or Friends Provident, you would pay this percentage on all U.S. stocks or U.S. stock funds (the witholding tax gets removed at the source, in this case, so you won't see it on the account, but you can read about it–in fine print–on their websites)

  12. Linda says:

    hi Andrew

    I'm kinda in the same boat. I had subscribed to the FPI Premier plan for the last 5+ years, sold unfortunately while I was an expat in China. Now i'm back to Singapore (where I am from) and a financial planner friend here alerted me to the high hidden charges that I've been paying.

    Like the American couple that you've befriended, I've also have over USD140K parked with them. Thanks for your advice above – I think I will take out as much money as I can without penalty and reduce my monthly premium to the minimum.

    Thinking back to what had attracted me to FPI originally is the mix of the funds that they had to offer (opportunities to invest in markets like Brazil, Russia, hedge funds) and I had assumed that nil difference between bid and offer price of the funds means a good deal for me. I admit I had not checked on the expense ratio of each individual funds that I hold and I now know the admin fees for the plan fees are also very high!

    My question is whether through a normal brokerage like DBS Vickers, will we still get to invest (at relatively low costs) in markets aside from the likes of US, Australia, Singapore, China and India? do you recommend only ETFs then?

  13. Hi Linda,

    Through DBS, you can buy indexes (ETFs) representing any country you want. I recommend against picking individual foreign markets though. Neither you, nor anyone else, is going to know which markets will do the best over the next year, five years or ten years. It could very likely be a sleeper, like Greece or Ireland. In fact, the odds of that are better than you might think, yet few people would pick them. That said, considering that nobody really knows, you might want to hedge your bets (like I do) by purchases an international index that owns the widest array of international markets, like VT (the entire world) or VEA (the developed first world) coupled with EEM (emerging markets). You might see the method as unsophisticated, but your odds of beating a diversified account of world stock indexes are incredibly low, over your lifetime.

  14. Mel says:

    Hi Andrew and readers,

    Andrew, firstly great book! Congrats on pulling off writing a book in layman's terms that everyone can read, learn and act on.

    I entered the investing world about 2 years ago indebting all my savings with an advisor at a large financial advising company in Canada.

    Over the last few months I have awakened to the fact that my broker's interests are not in my best interests so I have started on the long and sometimes confusing trail of educating myself on investing and how to build and manage my own investments successfully.

    I was hoping you or your readers could give me some guidance. Currently all my investments are spread over 9 mutal funds (surprise surprise, did I mention I worked with an advisor) with an average MER of 2.2%.

    I am thinking of selling my funds to reduce the MER's by purchasing ETF's and Bonds. The problem is all of the funds have DSC's until mid 2016. If I were to sell the funds now I would have to pay around $6,000 in DSC charges. I am not sure if I have gave you enough info here, but do you think it is worth taking the hit now paying the $6k to get me out of mutal funds so I can save the 2% on MER's?

    Or am I looking at this the completey wrong way?

  15. Hi Mel,

    This can be a really tough call. I don't know all of the details, but perhaps, it I paint a compounding picture/scenario, you may be able to use it to make a decision.

    Let's assume that you lose 5% to deferred sales load fees for exiting the funds (I'm not sure what your penalty would be, so you might want to have a look). Then, let's assume that you buy low cost ETFs with the proceeds. The ETFs would save you roughly 2% per year.

    Assume that from 2012 to 2016, your ETF investments generated a return of 8% per year.

    By sticking with your actively managed portfolio, there's a strong probability that you would make roughly 6% per year, based on the higher costs.

    OK…let's assume that your portfolio is worth $100,000.

    $100,000 making 6% per year (assuming you stay) over 4 years would grow to just over $124K

    If the sales load cost you 5%, you would have $95,000 to invest in ETFs, and let's assume you'd make 8% per year. After 4 years, you would have slightly more than $129K.

    Under these circumstances, it would be better to take the 5% hit. But again, I don't know what your hit would actually be for sure.

    I hope this helps you though. And thanks for the kind words about my book! If you have a few minutes to write a quick review on Amazon, I'd be thrilled! Here's the link, if you have time: http://www.amazon.ca/Millionaire-Teacher-Wealth-S
    Thanks Mel!


  16. Lisa says:


    From this post you are suggesting that someone living in KL can go to singapore to open an account in DBS Vickers and use exchange traded index funds. I was wondering how this is possible as i have checked the DBS Vickers website and it looks like you would need to be working in Singapore (with a valid employment pass) to open an account with DBS Vickers. Can you confirm that a foreigner that does not reside in Singapore (i.e a visitor/tourist) can actually open a DBS Vickers account in Singapore.



    • Hi Lisa,

      You don't need to be working in Singapore to open such an account. You could visit here, bring all your particulars, and open the account–then wire monthly savings to Singapore from your country of residence. I know plenty of non Singapore residents, firsthand, who opened their DBS Vickers accounts. This reminds me that I asked one of them to write a story about it (he teaches in Thailand) and I have it in my inbox somewhere. Firsthand, I know of the following people who have done it: two people residing in Thailand, one residing in Vietnam and one residing in Amsterdam. All three of them are Canadians. If you're American, you won't be able to open such an account. As easier option might be assetbuilder, for Americans: http://www.assetbuilder.com Let me know if you have questions Lisa.



      • Joe says:

        Hi Andrew, If Lisa is an American, couldn't she just open an account directly with Vanguard? That's what I do, and I can buy or sell Vanguard ETF's for free. That's right, zero transaction costs! Cheers! Joe

        • Hi Joe,

          If Lisa lives overseas, she can try, but unless she tells a small white lie, they won't let her open a Vanguard account. If Vanguard catches a sense that she lives overseas, game over. They brought that into effect about 3 years ago. If you are a current overseas American Vanguard customer, you can keep your account, but if you're trying to open a new account, they won't let you.

          • Lisa says:

            Dear Andrew,

            Sorry, it's me again….I was wondering….you mention that a portfolio should be 40% bond index fund and 60% stock index funds (i am 38 years old). You also mention that it is better to get a stock index or bond index from you home country or the country you plan to retire in.

            Well, i live in Brunei, and we don't have access to buying stock index funds or bond index funds and there is no broker in Brunei when i checked via the link you gave me http://www.selectabroker.com/Brunei-Darussalam/

            So, what index funds would you advise me to buy?

            I am trying to plan where to put my retirement savings once i get it out of Friends Provident!

            If i already have an account with a Singapore Bank where i can buy ETF Tracker Funds should i just buy them from them? I think they would charge USD150 per transaction…..is that a high charge?



      • Lisa says:

        Dear Andrew,

        Thanks for all your help & advice. I am not an american, i am Bruneian.

        I will look into the DBS Vickers account the next time i am in Singapore. Since reading your book (i am on chapter 5) and reading your posts i have realised that my retirement savings are with Friends Provident International and London 360….gulp!!!!

        This has happened over the last few days so i am trying to get in touch with my financial adviser to find out how i can get as much money out as possible without paying huge surrender charges. i will use your advice to the other couple where they took out as much as they could without a penalty and left the rest there and reduced their monthly contribution to the absolute lowest possible.

        Wish me luck.


        • Hi Lisa,

          If you learn about exchange traded funds, you could set up an account in Singapore with DBS Vickers. You'll need to fly here to do it. Then you could buy the world stock market index (VT) and the international bond market index (ISHG). That's all you'd need for full diversification. You'd pay $25 U.S. per purchase, so make sure you invest a decent sum at a time. You can then wire your money here. if you ask the bank for help, they will move you into what they want you to buy, and it won't be low cost ETFs! Good luck with Friends Provident. I hope it's not too painful.

          • Lisa says:

            Dear Andrew,

            I will continue to check my options with buying index funds(either low cost with DBS Vickers) or slightly higher cost index funds (at my existing bank). My question would now be…if I set up an account with DBS Vickers what would happen to the money invested if say something should happen to me before I take out the funds to use for my retirement?



          • The money would be in your name Lisa. Is as much "yours" and your family's after you die as it would be if it were in any other bank.

  17. mahathir says:


    I've been roped into Royal London 360 through IPP as well and have been making contributions for over 13 months.

    What has given you cold feet? I will be placing a substantial amount of my savings through this plan as well and am concerned. Would appreciate your kind feedback.


  18. Lisa says:

    Dear Andrew,

    Thank you for all your helpful advice. I have just finished reading your book & I am so thankful that I did as it made me look seriously at my retirement savings & made me realize that I was being duped!!!!

    You mentioned in your last reply to me that I should get VT and ISHG. I am assuming I should be getting approximately 40% in ISHG and 60% in VT…is that correct? Also in your book you make a case for buying short-term government bonds….is ISHG one of these?

    Lastly, is 2 funds enough for retirement savings and where could I find data showing past performance of these funds? Should I be adding another fund?

    Great book. Life changer for me

    Thank you so much


    • Hi Lisa,

      The historical returns of VT are irrelevant—it's a total world stock market index with a low expense ratio. ISHG is a medium term international bond index, but that should be fine. I don't know of a short term international bond index—I don't think there is one.

  19. Gading Karsika says:

    Hello Andrew

    I live in Bali indonesia and have been reading you posts on Friends Providential currently I am in the 12 month of the 18month payment plan/portfolio. I have already Committed 20,000 USD and need 2 more payments of 10,000USD to complete the initial startup investment. If I default on the next payments I will loose my 20,000. So what should I do? default or continue the payments? Do you have more knowledge on Friends Providential that may calm my nerves on the subject …… or is it to late and I should consider my $$ swindled?

  20. I think you should do the specific math on when it's best to pull your money. I'm sorry to hear about your circumstance, but you may find the best time to pull the plug. Keep in mind, however, that if you remain with them for a lifetime, you will receive very little of what will rightfully be yours. Too much will be eaten by the tyranny of their fees.

  21. Tony says:

    Upfront commissions for the IFA are typically your first 6 months of contributions for a 10 year plan, and your first 12 months of contributions for a 25 year plan. Friends Provident is the one you should be complaining to as they purposely encourage misbehavior by paying their sales force like this. Good luck.

  22. Harum says:

    1." ISHG is a medium term international bond index, but that should be fine."

    You responded to another reader, Lisa, as above. May I know why ISHG is fine even though it is medium-term and not short term? 

    2. Also, you mentioned to her, " Then you could buy the world stock market index (VT) and the international bond market index (ISHG). That’s all you’d need for full diversification."

    Normally you would recommend another index, a home country index, but did you not recommend it to Lisa because she is Bruneian and a Brunei index is not available through Vickers?

    I am a Malaysian, about to study in France. I plan to work in France after my studies but I do plan to come back to Malaysia in the future. (Especially to retire as my money would stretch further)

    Since French ETF and Malaysian ETF are not available through Vickers, should I proceed with a diversification like Lisa's or should I buy UK ETFs (in  lieu of French) and look for other options (besides Vickers) to buy Malaysian ETFs? Or should I just buy Singapore ETFs? Help! 

    • Hi Harum,

      There is a Malaysian stock market ETF. You're right about why I didn't recommend a home country index for Lisa. At this point, I don't know of one. But you should build with a home country equity bias. The ticker symbol you want is EWM. Here's the link: http://finance.yahoo.com/q?s=ewm&ql=1

      You can buy this via a DBS Vickers or Standard Chartered account…any account, actually, giving you access to the New York Stock market.

  23. Message to Gading Karsika,

    As the article said, you need to pay fees until the end of the "term". So if you open the account for say 20 years, you need to pay fees for the all 20 years regardless if you keep deposits going after the initial 18 months.

    At my firm we have tried several times to close this type of accounts and get the money back to clients that come to see us a few months AFTER being sold an account with Friends Provident by Devere, in the same fashion as the article describes. We complain to the Isle of Man regulator but to no avail. The reply is always the same: the client signed a contract that clearly states fees, penalties, etc.

    So the advise is to complete the 18 months and stop making deposits. Also, I recommend to share the story among your network but remember that it was not Friends Provident that advise you, it was most for sure an "IFA" working for some "regulated" company. He was the one that didn't tell you how the account works.

    Good luck.

  24. IFA Abroad says:

    Alfonso – why keep paying for 18 months when the aggregate fees on those contributions are going to be close to 10% per year, for the entire length of the term?

    • I think investing in one of these variable annuity plans (based on the prospectuses I have seen) will cost something like 3.5-4 percent per year in annual fees, not 10 percent. But I have to agree: these are nasty little products, sold by salespeople keen to make big bucks off the naivity of others.

      • IFA Abroad says:

        Andrew – great work on the site in regards to spreading awareness, but I'm actually correct when I say close to 10%. Have another look at the FP terms and conditions – there is a 1.5% quarterly administration charge on initial units – which is 6.14% a year, on initial shares and all those ridiculous bonuses (the ones that were about to run out before you signed on). Then you still have the investment admin charge of 1.2% and then the external fund fees – which usually add up to around 2% (total expense ratios, AMCs are nonsense). This is also ignoring other fees like funding the account with your credit card (1%) or foreign exchange fees. So there you have it – 9.3% in fees per year – and that's generous! That's charged on the initial units (everything you contributed for the first 18 months), every year for the entire term. If you continue throwing money at them, maybe you can work the fees towards 3.5%-4%, but why would you throw good money after bad?

        People are blown away when they learn it's actually 6.1%. It's so underhanded to quote the fee on a quarterly basis (who else in the world of finance does that??) AND who would have thought an initial charge is applied every year for the entire term? These insurance companies are horrible.

  25. Hi IFA Abroad,

    Gading said "I am in the 12 month of the 18 month payment plan/portfolio" and I assume he was sold Premier from Friends Provident:


    On page 4 it says the account will be "surrendered", which means closed in life insurance jargon. We encounter this issue recently with a Deveres sold/advised Friends Provident Premier. The client stopped deposits after 14 months because he find out that the information he received was incorrect, but didn't do anything else. He came to see us when Friends told him via letter to deposit the remaining 4 months or else. After we explained how the account really works and what he had been sold –he had been told that there were no fees AT ALL after 18 months– he decided to let Friends close the account.

    The client end up losing the equivalent of 5 months deposits (he had made some investment profits in 2011 and 2012; and luckily he is almost 65 years old, so the "term" was for ten years "only" because of age limit.

    Letting the account close is also an option to Gading, but he needs to calculate how much he will lose, both financially and mentally. If he has signed a contract for 25 years (called "term"), the loss after 12 months deposits may well be… 12 months!

    By the way, to my knowledge Friends doesn't sell directly to the public. So far, all similar cases I have had the opportunity to work with, were sold by an intermediary, broker, IFA. Never directly by Friends.

    • IFA Abroad says:

      Singapore regulators are actually debating whether they should ban commissions – and this is exactly the type of story the press and regulators in Singapore need to hear!

      Organize all the details related to your complaint and submit it to authorities. They can't ignore it if people keep coming out of the woodwork.

  26. Darren says:

    Having read through several of these comments, as well as many others on other sites that describe the Friends Provident "Scam", I am convinced that taking out one of their policies was one of the worst financial decisions my wife and I could have made. Like others, we trusted that our money was going to make money over the long run and we wanted to set up a retirement fund for our new family. As we are both international teachers this seemed like a wise decision and was reinforced by our DeVeere agent who ever so kindly did not go into much of the details of the charges of our plan. We' re 3 years into a 25 year plan now and have recently asked for a surrender value. Here is what I received from Friends Provident via the agency (Total Premium Paid $55,562):

    Plan Value: USD 57,115

    Surrender Charges: USD 26,841

    Surrender Value: USD 30,273

    That's an awful lot of money to lose for us. It makes me sick. The problem though, is that I'm likely to lose even more over time as the"1.4% quarterly charge" depletes all of my initial units. Not to mention the other charges.

    I feel as though we are stuck in a "Damned if we do, damned if we don't" situation.

    Andrew (or anyone else who has been in a similar situation), if you have any suggestions, alternatives or otherwise that might help out our situation I would greatly appreciate it. I just want to make sure that I do more research and analysis this time before I cancel our policy and make potentially the second worst financial mistake of my life.

    • The world stock index, including dividends, has increased by 12% in the past three years Darren. Bond returns have been similar. Rebalanced, you should have made roughly 12% in a low cost global portfolio over the past three years. Your account, unfortunately, is already showing signs of fee hemorraging. If you had gained 12% overall, your plan value would be $62,234, so you are already about $5000 behind. I can't make the decision for you. It's a personal one to make. But I sympathize wholeheartedly with you and only wish there was more I could do to help.

      • Hi Andrew,

        Usually the signs of "fee hemorraging" are seen at years 5 or 6 and after because the product pays bonus during the first 18 months. This is why Devere advisers use this product, 5 years gives the adviser a long time to move to another city, country, cheat a few more, move again…

        I think Darren invested the $55,562 by on a monthly basis and over 3 years; not a lump-sum one time only at the start of 55k. Anyway, if the plan value is now $57k, there are been mistakes on the investment strategy. Who is managing the money?

    • IFA Abroad says:

      I feel for you – no one should ever be in this situation. For a 25 year policy, devere was paid a bit over 12 months of your contributions as commissions – upfront. That should give you a better idea of why the surrender value is what it is (and why he forgot to mention fees).

      A brokerage account lets you avoid the 1.2% investment charge and ETFs drop your fund fees from 2%+ total expense ratios with FP to between 0.1%-0.7%. Sending more money to FP does not make sense compared to the brokerage account alternative (i.e. 3.2-4% charges on new money, or less than 1%?). When it comes to personal finances, you need to start confirming/verifying information – and to start – for all these fees I'm talking about here and in the post adding up fees on initial units – look it up yourself to confirm it applies to you. Look at the portfolio you have and add up all the total expense ratios (you need to make a weighted average), and verify all the other fees I mentioned. And if you see ANY error in what I've said, let us all know in a response (that goes for all the people selling these plans that stumble upon this site as well).

      Technically, your advisor was paid 25 years of commissions upfront to give you advice for 25 years – but do you expect this person to deliver on that? and would you want to continue seeing someone that did this to you? Most people I know just get out of the plan completely to recoup what they can, as the 10% annual charge on initial units is obscene, and sending new money does not make sense either. You could ask the guy how sending new money would help your situation in regards to fees, but make sure to get their answer in writing. If you're American, these are an even bigger mess (PFIC rules).

      Going forward, explain to local regulators what happened with your experience. Warn all your expat friends and colleagues – especially new teachers coming to town. And if you want to talk to the media – the South China Morning Post in Hong Kong is running a series on investment scams – contact them. You could also talk to local media outlets.

    • Darren,

      My two cents:

      1) Complain to Friends Provident Isle of Man with the Isle of Man regulator on copy on all communications; you need to attach all written exchange you had with your Devere adviser. It's fundamental that you prove you were not made aware of the product fees by Devere.

      2) Devere claims they have licenses in every country they have an office but that it's not true. You can also use the same complain and send it to the local regulator. For instance, if the advise was given in Singapore, the MAS will take action. You have an arbitrage court available, for free, to help you.

      3) Go –if you can– to Friends Provident office in Singapore and complain in person. Be aware that they do not know that Devere misrepresents their products and doesn't inform clients of the fees involved.

      4) As "IFA Abroad" said above, share your story with everybody.

      5) Good luck! And PLEASE, if you can get all your money back, do let us know how you did it. I have been trying to close these accounts for several of my clients without success until now.

    • Hi Andrew,

      Usually the signs of "fee hemorraging" are seen at years 5 or 6 and after because the product pays bonus during the first 18 months. This is why advisers use this product, 5 years gives the adviser a long time to move to another city, country, cheat a few more, move again…

      I think Darren invested the $55,562 by on a monthly basis and over 3 years; not a lump-sum one time only at the start of 55k. Anyway, if the plan value is now $57k, there are been mistakes on the investment strategy. Who is managing the money?

      • I was considering the expense ratio fees on the funds themselves. My guess is that they were running about 1.5% to 1.75% each year, for 3 years. Such a drag on performance will also affect Darren over the long haul…and they likely ensured that he underperformed a global basket of low cost stocks and bonds over the past 3 years.



  27. Darren says:

    Thanks for the replies to everyone. I can give you some more information that might help you to give me some advise on my next move. We opened our plan with Professional Investment Consultants (https://www.pic-uae.com) while living in Abu Dhabi. Our payments were monthly and set at $1600 USD for the first two years. We moved to Oman last year after having a child and lowered our payments to $900 USD monthly as we moved to only one income. Unfortunately, this means that most of our money went into the initial units and are therefore subject to larger fees and penalties upon cancellation. Easy to see with hindsight (and now that I know how Friends Provident fees work) that we would have been better off with minimal payments at the beginning. We were directed to speak with an advisor at International Alliance Muscat (http://www.ia-muscat.com) when we first moved to Oman but on my recent review meeting last month I met with a different advisor. I get the feeling Devere is a large turnover company. Our portfolio for our plan is as such:

    J30 J.F. India (20%)

    P58 Templeton Bric (10%)

    P60 Martin Currie GF Global Resourc (10%)

    S112 Jupiter Global Financials (10%)

    S258 Strategic Growth Fund (USD) (50%)

    I must admit that although I have been watching these funds over the last 3 years I have no idea whether or not they are "good" or "bad" funds to be investing in. My lack of financial experience and vocabulary in this area, coupled with my naivity, led me to believe that was what my financial advisor was to be determining for me.

    I will put together the written information that I have from Devere and FP and let you know what I have. I was mostly just shown projections and estimates for how much money I could expect to have in 25 years at the end of the plan. Obviously, I was unaware at the time at how incredibly well my funds would need to perform in order to offset the cost of the fees. As a teacher who knows the excuses "I didn't know it was like that" and "It's not my fault" simply don't fly, I should have done more independent research.


  28. IFA Abroad says:

    Your largest holding – Strategic Growth Fund – try to find the prospectus on it. I haven't researched it before, but I think it's a fund of funds – which would mean there are Strategic Growth Fund fees on top of fees for the funds held within the fund. Find the total expense ratios for all the different layers, and see if the fund company passes any breaks on expense ratios to investors (doubtful). You might be paying 3% in fees a year on that fund alone.

    Your Jupiter Financials is 1.9% a year – http://factsheets.financialexpress.net/frii/_s112

  29. Farly says:

    Dear Andrew,

    I have been with FP Premier since 2009 and in total I have invested about $34000 US of my money which currently has a portfolio value of about $39000. I am 3 years in on a 25 year plan and if I surrender i am looking a 84 or 81% penalty on my initial units which was $27000 of my money plus the additional 42% bonus units that I got on the initial units. I have not contributed any new funds to the portfolio for about a year and its value has fluctuated from $36000 to as high as $45000. It seems to be on the rebound now and I am leaning towards leaving it in for a while to see what happens. What would you recommend?

    Thanks for your input!

  30. David says:


    Are you saying that all savings scheme accounts with Friends Provident are not really saving me anything?

    What do you suggest I do? I am an American who started this account while overseas, but have just returned to the USA to live and work.

    Thank you,


    • David says:

      Just to say that I have been in it 6 years, and so don't have the large amounts that others are talking about. Still, contributed about 13 or so thousand so far, and cash-in value is about 10,000, so I'd lose between 3 to 4 thousand.

      As I don't have much money, Assetbuilder wouldn't accept me, but would Vanguard?

      • Are you from the U.S. David? To invest with Assetbuilder or Vanguard you would need to be American. Otherwise, let me know where you are from and I can try to direct you somewhere.


    • Hi David,

      Sorry, I missed your comment above. Yes, certainly invest with Vanguard. Pull your money out and count your blessings that you caught on to this when you did. As an American, you would have to declare all gains anyway, to the IRS. They would frown on you owning such an account anyway.

      With Vanguard, you could invest the way I describe in the 6th chapter of my book. Also, you could look at the model portfolio in my fairly recent post about investors at Singapore American School (I posted it about two weeks ago). It provides a sample. Or….you could opt for a hands free Target Retirement fund through Vanguard. I also discuss these in my book.



  31. Brendan says:

    Hi Andrew

    I have just been given the link to this website at an IB conference. So for our story…

    We have been with FP since September 2006. We invested through Warwick Man when we lived in Amsterdam. We are still investing whilst living/teaching in Singapore. According to our latest statement, the interim value is 25500 euros. So now the big question is what should we do? Cash in, take the hit and start again? I am 43 years old so still have time left to rebuild. We do also own property which would is our main retirement nest egg.

    I look forward to your advice and in the mean time I will find out what my surrender value would be as well as open a DBS Vickers account.



    • Hi Brendan,

      From a purely mathematical point of view, taking the hit would likely be much better in the long run. With a more efficient investment plan, you would more than catch up. But I can't tell you what to do because there's an emotional component to the decision that might affect individuals in different ways. You know what I would do, and what many of my readers have done. To read more, check out the following link: http://andrewhallam.com/2011/11/zurich-internatio

      If you have other questions, feel free to ask them. There's an army of people who have generously given their feedback on the link above. One of us can continue to answer your questions if you have any.

      So sorry to hear about your misfortune in this case.


      • Brendan says:

        Hi Andrew,

        Thank you for taking the time to reply, I appreciate it.

        I am currently on a payment holiday with FP and as I said before, i am investigating the surrender value of the product. I have ordered your book and await its arrival. I will also investigate which account (DBS-Vickers or other?) to open.

        Do you recommend any account now that DBS has increased their charges? I am looking for one that I can continue to use as I move. By that I mean when we leave Singapore (possibly at end of this academic year). Any suggestions or do I open a new account at each country I decide to live/work in?

        I look forward to your (or someone else who is equally knowledgeable) reply.


        p.s. My wife and I are Brits and would probably retire somewhere in Europe.

        • Brendan says:

          Just found out the particulars from FP.

          All totals are in Euros.

          Current value: 27938.34

          Fees to close: 6515.07

          So surrender value = 21423.27

  32. Brendan says:

    I just received the surrender value from my original broker and it is a lot less than the surrender value quoted to me by FP.

    If/when I decide to surrender my product, do I have to go through my broker or can I just go straight to FP?

    • IFA Abroad says:

      It's really odd for there to be a difference between what FP and the broker tells you about surrender value.

      Ultimately, you own a product with FP. You can cut the broker out and deal directly with FP at any time.

  33. Debrilepe says:

    Hi Andrew,

    I have been reading your blog with great interest over the last several months. I have also read your book, which really was a lot of fun with excellent information. I do want to thank everyone who has posted comments on this blog, as they really are very informative, and unfortunately in many cases very sad.

    Being in a similar situation to many others who have posted, and having similar sentiments, I was wondering if you know whether anyone has pursued legal action in Singapore, against any of these providers or the financial "service" companies that sell these products? With all the complaints, one would expect that someone would have tried the legal route, and that these kinds of actions should not be permissible in a country such as Singapore.



    • Hi Debrilepe,

      I was asked recently by a representative from a financial firm, here in Singapore, if I would do something to get a group together to pursue legal action. The big issue would be the misleading component. Salespeople flog these things and don't explain how (or how much!) they get paid for establishing an account per client. Nor do they explain the surrender value components clearly, nor how the fees impact returns. Any reader of this blog could likely get something together. But currently, I don't have the time to pursue it myself. Any takers?

      • Debrilepe says:

        Hi Andrew,

        Hmmmmm… That's very interesting. Yes, I am interested in seeing how many others might be interested in a law suit in Singapore….


  34. Dear Andrew,

    Thank you for your attention. I'm a 39 years old brazilian and living in Brazil at present. I have just opened an account at Lloyds Bank (Isle of Man). A brazilian Investment Consultant Agency invited me for Friends Provident Wealth Plan. I'm not happy about having to pay a high penalty if I decide to withdraw my money in advance. As I 've just started it ( I paid three contributions only – US $ 1.000 each), I've been thinking about canceling it soon. What options do I have? What could you suggest me? My main purpose is to save money enough (for around 20 years) to acquire (totally or partially) an apartment overseas.

  35. Honest Adviser says:

    Hi Darren,

    The comment about the adviser receiving 25 years of pay for 25 years advice is a great call.

    I tend to use plans with a 5 year period that you can continue paying into ad infinitum if you wish.

    The difference in cost for essentially the same vehicle is remarkable.

    You can then use the accumulated wealth to enter a more flexible vehicle where you can invest in ETFs, direct stocks and bonds, various currencies, alternative investment funds, structured notes etc etc at low cost.

    Trying to surrender the plan now is very bad advice. You should rather make it "paid up" and start afresh. This way you have a chance of preserving the value if you can gain exceptional returns while not adding further funds.

    That said, once you have paid the initial period (this will be roughly the amount you pay in wrapper fees to generate commission for the adviser), the premier plan is quite cheap.

    You are only paying the 1.2% mirror fund costs.

    There are a number of loyalty bonuses that kick in down the line (depending on the style of premier plan you have)



    • IFA Abroad says:


      1.2% is the mirror fund admin fee, and then you have fund fees on top (say 1.5-2%), so anything after the initial units are going to be annual fees of 2.7-3.2%, and that's ignoring other charges like foreign exchange, mirror fund drag, and 1% credit card fees.

      Is it really possible to save your initial units by agreeing to keep it locked in with 10% annual fees?

      • Honest Adviser says:

        Hi IFA abroad,

        You are correct, the underlying funds all have their own management fees which vary from nearly zero up to around 2% depending on the fund. Etfs will also have an annual fee from nearly zero up to around 1% depending on the ETF.

        The etf fee is rightly lower as there is no management to speak of in most cases which can be good in tight markets or for generic exposure. This guarantees average performance against a chosen index which for many people is fine.

        The benefit of using platforms such as FP et al is the institutional terms on purchase of funds from the worlds leading managers. You are also able to dollar cost average your access to such funds for very low amounts and switch without cost as you choose.

        Mirror fund drag is hard to measure and can be negative or positive depending on the market. Personally I would look more at Generali or Royal London if this were a concern as they invest directly without mirrors. Also, neither company charges a credit card fee.

        Exchange rate risk is oft overlooked but monthly cost averaging to your reference currency is right for the majority of people.

        Another overlooked point is the investor protection offered by the (in Friends Provs case) the Isle of Man which is exceptional at 90% with no upper limit. These companies will also provide basic trusts for free.

        I have just run a cost analysis for a 2000 a month contribution to a premier plan over 25 years, the RIY is 1.42% when you look at all the charges and bonuses. (FP add 4.8% of the fund value as a loyalty bonus every year after year 10 for example) The funds then have their own costs.

        So, 1.42% for Friends Provident and their advantages aswell as a full time IFA is fair value in my opinion. The issue is that most people are not given the right plan or explanation.

        In the above case, if you do not stick with the plan for its duration it gets very expensive. If flexibility was more important than discipline for savings a 25 year plan is the wrong advice.

        Once again, everyone is different and it's a good advisers job to give the right solution to everyone.



        • IFA Abroad says:

          Mirror fund drag is caused by money held out of the market. Over the long run, this is a bad thing – particularly because of how opaque the practice is.

          I didn't refer to exchange rate risk – I referred to exchange rate fees from when investors are contributing one currency and the advisor is recommending funds denominated in another.

          With these plans, investors don't actually own the funds – the insurance company owns the funds – and investors only own a promise from the insurance company. This is unlike a brokerage account, where the broker holds your funds in custody and investors actually own the funds and not just a promise. Even with investor protection for the insurance company's promise to repay, I would prefer actually owning the funds.

          1.42%? You have excluded fund fees without saying so, and your summary still excludes a number of other fees. The truth is that if the cost was remotely reasonable, the fee structure would be simple. Instead, it's incredibly complicated, because it's the only way to hide and recover the upfront commissions.

          • Honest Adviser says:

            Dear IFA Abroad,

            I am starting to think that you are not an IFA at all. A key skill for an IFA is reading things and absorbing the detail.

            I start my post by saying that underlying funds have their own costs and end the paragraph about the 1.42% RIY by saying it again.

            The 1.42% includes all plan fees, negative and positive, what do you think has been left out?

            Exchange costs often irrelevant as my clients mainly earn, contribute and invest in USD. Where this is not the case it would be a bank that makes that exchange and I fail to see how that is avoided anywhere?

            A mirror fund (not a huge fan myself) is essentially that, a mirror of the underlying fund. It will have a small cash holding as it receives a whole stack of money each day from potentially millions of investors which they collate. That means returns will never be identical.

            I agree that the complexity is a negative. It also means that some so called "advisers" can mislead clients either intentionally or through stupidity.

            How are you remunerated for your time and advice and which savings and investment vehicles do you use? I am always keen to have options.



          • IFA Abroad says:


            I'm an advisor, but the point of this discussion is the product, not how I work or you work.

            Look at one of FP's illustrations, for example where it says the growth rate is 9% – use a calculator to confirm the end amount's actual growth rate. It's not 9%, it is about 1.1% lower – because the projection includes fixed fees and the best case scenario assumption of never missing a payment in order to get every possible bonus.

            Footnotes clarify that the illustration excludes the 1.2% fund admin charge as well as mirror fund fees. So say a total around 3.8-4.3% a year, best case scenario of NEVER missing a payment. This ignores mirror fund drag, foreign exchange fees and the 1% credit card charge.

            This was hard for me to figure out (I actually had some help from another advisor), and I'm guessing this is big news to you. You made a valiant effort coming up with 1.42%, and I know you're trying to be honest – as very few IFAs would ever try to do what you did, and even fewer would know where to start.

            If you are in Singapore, check out a platform like iFast.

          • Honest Adviser says:

            Hi IFA Abroad,

            I think this conversation is great as we are really clearing things up for people.

            The 1.42% was calculated with my colleague who has a first in maths, the client (a maths teacher) and approved by the actuarial guys at Fpi.

            It came about as their RIY figures on a flyer suggested the plan cost less than 0.3% p.a.

            The 1.2 admin fee is the "mirror fund" charge. The underlying fund fee can't be included in a projection as there are over 230 funds with different amc's.

            It involved a pretty massive spreadsheet and factored in every measurable cost.

            You are correct in pointing out that you need to maintain payments to get all the bonuses whereas costs are a definite. Loyalty bonuses are not paid in years you do not contribute. This should be explained to all clients. Some like this aspect as it pushes discipline though I don't think it's ideal in most cases.

            How you charge and the vehicle you use is important if you are concerned about the clients TER. One option has been denounced but no others truly explained.

            Singapore is a no for me as I and my clients are in bed when they are at work as I am in LATAM.



          • IFA Abroad says:


            I explained how I got to my number – and with FP's own illustration that gave it to us (not transparently, but it's in there). And that number is the best case scenario.

            You ignored what I explained and say you need to be a math professor to figure it out.

            It's misleading to say that net charges are xx while excluding fund fees. Most portfolios I have seen for people in these plans had 1.8-2% total expense ratios. I have never seen one come in with a TER below 1.7%. Why are the fees high within the plans? Because the insurers get kickbacks from the fund managers for listing them on these platforms. Why can the funds charge so much? Because they're the only ones available.

            If you understand the benefits of index investing, you understand the importance of cost, which rules an investment like this out.

    • Looking though the Generali material, I can't see any inexpensive insurance linked products.

      I have seen variable annuity like products offered from Vanguard that are about as cheap as actively managed mutual funds, with no penalties for early withdrawals. And I have seen some decent fees (although much more expensive) associated with products from TIAA Cref.

      Other company products I have seen seem to have 3% fees associated with them, when counting expense ratio costs.

      • Honest Adviser says:

        Hi Andrew,

        Unless you have terms of business with Generali you will not get to see everything. I am in that position and as such am able to comment.

        This all revolves around client circumstances and what is best for the individual. To advise un-sophisticated investors to buy a couple of ETF´s that may not remotely match their risk profile or investment goals would not be allowed in any regulated market on earth.

        It may however work out well and by chance match goals. It is certainly a low cost way (depending on trading fees and transfer costs) to attain generic investment exposure. I would be very keen to know a lot more about the broker and the investor protection laws in the jurisdiction. (I do not work or live in Singapore but DBS Vickers do recommend any non Singapore resident takes advice where they live)

        The concept of know your client is key. I fear the majority of advisers in the "offshore" market do not worry too much about this and rather look to their own bottom line.

        I have clients at Generali that are paying 0.8% for an open architecture investment platform.

        An example of one that I reviewd last week is about 60% in ETFs. We also hold direct company stocks, some currency deposits, actively managed funds and some alternatives and structured funds. The vehicle is held under trust and can accept further capital injections from anywhere but the US.

        This was the right solution for this client. He is the Regional Director of a household name company and I have worked closely on this with his Canadian lawyers and accountants. All of them are very pleased with the advice and the value of it.

        I think the key is that everyone is different and so are their goals and attitude to risk. The right solution for the right person at the right price. Investors who know what they are doing and do not want or need advice can always look online for accounts to trade. I normally point them to Saxo Bank if in doubt.

        If somebody wants to save an amount each month though, transfer fees to a broker account (typically $50+ or so from most banks) is ludicrous for a teacher saving $500 a month who also wants the advantage of dollar cost averaging without trying to time markets.



  36. I love FP says:


    Do you invest your retirement savings through these products?

    The only reason why I think any "adviser" uses FP, Royal London, Generali, etc is the lucrative upfront commissions. Product bias is created with remuneration structure. These products are designed exactly to create that bias at the expense of the investor. The complicated fee structure is to hide its true costs. I believe the upfront commissions is up to 7 months of premiums for a regular premium product. If you can sell a USD3,000 monthly premium product, you receive USD21,000 commissions upfront. How attractive is that! FP pays one of the highest commissions. The high early surrender charge is to compensate for the upfront commissions already paid to the adviser.

    Can you tell me the comparative advantages of FP versus direct investment platform of actively managed funds such as iFAST(Singapore), Transact (UK) and Charles Schwab (US)?

  37. Chris says:

    Dear Andrew,

    I must say that having read the rubbish that you have written here about the one of the world's largest and most successful investment companies, Friends Provident International, my own opinion is that if there is any "con" going on it's what you have written.

    It is obvious to me that you have a personal issue with Friends Provident and that you are using the fact that you wrote a little book once in your mundane little life to sully the reputation of an institution that has been around and served millions of people and corporations for over 180 years.

    What you are doing is highly destructive and extremely malicious. You are advising people to early surrender their investments with Friends Provident and you have actually gone as far as having provided a competitor to Friends Provident, Vanguard, as an alternative. This smells of a personal fiduciary interest Mr. Hallam.

    Are you attempting to hoodwink people into believing that Vanguard or any other investment provider does "not" charge Establishment Charges or Annual Management Fees? Is there any company or bank in this world so absolutely charitable that they are prepared to operate their businesses without paying themselves?

    The now retired CEO and shareholder of Vanguard is worth net, 80 Million Dollars. Are you attempting Andrew Hallam, to have innocent investors believe that John C. Bogle and the other Shareholders of Vanguard survive on pure Goodwill? What you are doing, to the financial detriment of any investor that takes your very foolish advice Sir, is hoodwinking people away from Friends Provident over to Vanguard.

    Are you being paid by Vanguard for this service Mr. Hallam?

    There is not one investment provider operating a business on this Planet Mr. Hallam, that does not charges fees for almost every transaction that they do on a client's behalf. Starting at your local Bank Mr. Hallam, when you wire money from your personal Bank Account to someone else, does your Bank charge you, or are in some "special" Bank that does not charge for services rendered? Are you aware Mr. Hallam, of the old adage that " there is no such thing as a free lunch.?"

    Everyone charges Mr. Hallam, including Vanguard. John Bogle did not make his 80 Million because he charged nothing. So what you are doing here, Mr. Hallam, apart from being in very poor taste, is actually quite disgusting. My advice to you Sir, is to leave financial advice, to the professionals.

    In other words Andrew, according to you, every investor ought to cancel all their investments with Friends Provident, Generali, Aixa, Zenith Life, Hansard, Zurich Life, Allianz, HSBC, BNP Paibas and buy the Vanguard Asset Builder?

    Can you tell me Mr. Hallam, but more so the investors that you are advising to cancel their investments with Friends Provident, what special qualifications and experience you have Sir, apart from having written a novel, that allows you to provide such destructive financial advice to these people.

    Can you also let me know Mr. Hallam, why it is that you have herein singled out an organization that has an outstanding worldwide reputation for what they do, and do, well?

    My advice to all of the people that have unfortunately come across this blog and Mr. Adnrew Hallam's views is to ignore this poor attempt by a man obviously carrying his own cross for Friends Provident and seek advice from professionals, not writers of fiction that bear personal vendettas.

  38. Premier Shareholders says:

    The Isle of Man government conspire in the business of obtaining bank transfers by deception by claiming that using bank loans to speculate in traded endowment policies (TEPs) is a “low” risk investment strategy, failing to disclose exit penalties is quite acceptable, that financially unsophisticated pensioners (including 80 year old widows living alone) can be routinely catalogued as “experienced investors” and that the phony “introducers/agents’” can legally be described as “professional financial advisors”.

    This is an evil fraud sponsored by corrupt politicians, fraudulent financial services “providers” and a bogus regulator.



    • Premier Shareholders Group:

      Let's hope that there are some financial establishment that are honest and upfront with fees on the Isle of Man. The biggest problem, however, may be the advisors who sell this rubbish for big commissions. They have to be acting as fiduciaries. But they rarely do.

  39. Ceian Schmidt says:

    Hi, I'm new to Singapore. Does anyone use IFS? Any comments?

    • Ceian,

      I am not familiar with this group. Feel free to contact them and ask these questions:

      1. How much do you charge for your services?
      2. Do you invest exclusively in low cost passive funds where possible?

      If they suggest that they don't charge a fee, and that they are paid by fund companies instead, give them a miss. And if they invest in actively managed unit trusts instead of passive funds, you should also sidestep this company.

  40. Ceian Schmidt says:

    Does anyone use IFS? Are they any good, ie honest?

  41. IFA Abroad says:

    To clarify – FP commissions for their products are in line with other insurance companies for these types of products – Royal London, Generali, Skandia, etc.

  42. IFA Abroad says:

    "This smells of a personal fiduciary interest Mr. Hallam."

    I think you meant to say personal conflict of interest, but got confused and thought fiduciary was a bad thing. Not too surprising based on the rest of your comments.

    Vanguard does not pay anyone to recommend them. That's how they keep their fees so low compared to competitors. Since you're an advisor, call them up yourself and ask for an introducer's agreement, or if they can provide you with any finder's fees for sending them business. They will tell you no for both.

    Vanguard has $1.6 trillion under management now – do you know how much the founder of a company of this size would be worth if it was run like any other Wall Street firm? BlackRock's CEO made about $22 million in 2011 alone. Based on the size of the company, Bogle's net worth should be up there with Gates and Buffett right now. Criticizing the founder of one of the best companies in the world for amassing $80 million is absolutely ridiculous.

    Be honest and tell your clients the truth about how much you make when you sell them these products, and let them decide whether it's fair, and whether a payment like that could influence your opinion of how great the product is.

  43. biff says:

    My wife and I "invested" in a PIM product through Royal London 360. They had done due dillgence, or so they said, on Axiom Legal Financing Fund and approved it for sale by their IFA's wthin 9 months we lost our entire investment of $100,000 in this fund. As I remember Royal London is one of those fine firms Chris applauds.

    Sorry, they said, some investments go down! Maybe 10% or 20% but 100% in one day!!!

    Help me understand, Chris. Thank you.

  44. Fred says:

    Hi, Does anyone know of a company called IFS? Are they any good?

    • Hi Fred,

      I am not familiar with this group. Feel free to contact them and ask these questions:

      1. How much do you charge for your services? If they charge more than 1.25%, this is too much.
      2. Do you invest exclusively in low cost passive funds where possible?

      If they suggest that they don't charge a fee, and that they are paid by fund companies instead, give them a miss. And if they invest in actively managed unit trusts instead of passive funds, you should also sidestep this company.

  45. Hi Chris,

    If you sell high-commission paying financial products through a company like Friends Provident then I can understand how upset you would be to see the products fully explained. The book I wrote (which you described as "puny" "fiction" and a "novel" simply references the shared philosophy of some of the world's greatest investment minds: Warren Buffett, Princeton Economics professor Burton Malkiel, Yale's endowment fund manager David Swensen, Harvard's chief investment officer Jack Meyer and a slew of Nobel Prize winners in Economics.

    As a commission-based salesperson, you are indirectly referring to those men as "puny" creators of "fiction" when deprecating a book that simply compiles their consistent philosophy: that high-cost commission paying investment products (such as those you sell) are unfair options for investors.

    Neither I nor Warren Buffett nor any Nobel Prize winner in Economics is on Vanguard's payroll. But we all admire a financial service company that (unlike the products you sell) puts investors first. Vanguard is run much like a non-profit organization. Nobody owns Vanguard shares. There are no public shareholders. Like a co-op, the owners are the (big and small) investors who buy the funds. This is why John Bogle, the founder, is referred by the American press as Saint Jack.

    Because of this corporate structure, you can own a Vanguard portfolio for less than 15 basis points each year, compared to 350 basis points for a Friends Provident variable annuity.

    What "IFA Abroad" suggested about Bogle's personal net worth is true. If Vanguard were a regular "for profit" public, traded company or a private one like Fidelity, then Bogle's net worth would be in the billions (as is Fidelity's Johnson family's wealth).

    As it stands, his $80 million net worth is easily explained by a strong (though unexceptional) salary and a frugal lifestyle. Bogle has been working and writing for 60 years. If you invested $28,000 per year for 60 years at 9.8% per year (roughly the 60 year market average) you would have more money than Bogle: $85 million.

    However, if someone had sold you the products you are selling others, you would pay at least 3% more in annual fees (including Friends Provident costs and actively managed fund expense ratios) and would wind up with $22 million. The long term cost of that extra 3% annual fee, in this case, would be $63 million.

    Granted, most of us invest much less than $28,000 each year, and we won't likely be investing as long, but the tyranny of extra fees becomes very clear with this example.

    It may be time for you to stop challenging me and continue learning instead. Instead of continuing to sell high-commission products, you could opt for products that will better serve your clients. I have written profiles on this blog about such advisors/firms (guys like Tony Noto, Robert Wasilewski, and the firm, Assetbuilder).

    Vanguard is not the only option. There are "for profit" investment service providers that charge more than Vanguard (because yes, they exist to make a profit) but they charge far less than the variable annuity Friends Provident scheme that I will continue to work very hard to criticize.

    As a personal finance columnist with The Globe and Mail, Canadian Business magazine and Assetbuilder (a competitor of Vanguard's) I have never, in my life, seen anything as expensive and unfair as the variable annuity investments sold by Friends Provident.

    Just because a business grows large (Zurich International, for example) doesn't mean that all of its products admirably serve people in a healthy way. Just look at McDonalds, Coca-Cola and the variable annuities sold by Zurich and FP.

    I believe, by your impassioned response, that your heart is in the right place. But you need to keep learning. I have faith that you could make the right professional decision, going forward, to model the integrity of some great advisors. But you would have to be prepared to make less off the backs of others.



  46. Debrilepe says:

    Extremely well said, Andrew! BTW, spoke to our FA whom we started working with a few months back… AND… he told us we should be investing in Index Funds & Index ETFs… for all the reasons you mention in your "novel." ;-)) We also own a few stocks through him, which are all good solid companies and have done very well.

    At one point I asked him about these kinds unit trusts, (or whatever they're called,) his response was,

    "Stay clear of them! You'll never hear me speak about them, I don't own them and don't recommend them."

    Great to hear that out of an FA! Unfortunately, a bit late for us now though. I wish we'd been given that advice several years ago.

    Anyway Andrew, I applaud your response to Chris above, and your "novel" should be become bedtime reading to all the young ones out there, so that they don't make the same mistakes their parents did.


    • Thank you Debrilepe,

      And I'm thrilled to hear that you have an upstanding advisor. They aren't easy to find. Hang on to this one and help to promote his/her business if you can. It sounds well-deserved, and your advisor's profit margins wouldn't be that high.

  47. Message to Biff:

    You have an investment account with Royal London 360, an insurance company based in the Isle of Man, a subsidiary of Royal London UK, a large and historical company, with good customer service and some good products.

    PIMS it's an expensive investment account in open architecture, which means you can buy almost any asset you want, with few exceptions. This product is for savers/investors with many years of experience, and to be managed by REAL investment managers not by wheeler-dealers.

    Like many people here, your "financial adviser":

    1- may have "forgotten" to explain the fees of PIMS, which start at 8.5% paid initially or in several years;

    2- may have "forgotten" to explain the investment risk of having all your money in one fund only (Axiom);

    3- and may have "forgotten" to explain the jurisdiction risk of Axiom, as this particular fund is a incorporated in the Cayman Islands, were regulation, controls and checks-and-balances are almost non-existent. By the way, this makes it the right place to create ponzi schemes and other type of frauds. Now you understand why PIMS is for investor with experience.

    4- Finally, he may have told you or not that he made a commission by selling you PIMS, and another commission by selling you Axiom inside of PIMS.

    A few months back my firm was approached by perfect English accent well dressed Axiom people. Even do I explained that my firms' internal rules do not allow us to invest in funds domiciled in the BVI or Cayman, their answer was "but everybody is doing it!".

    I recommend to follow-up directly with Royal London to see if you can recover some of the money. According to this website http://www.offshorealert.com/axiom-legal-financin… it seems there must be little money available.

    Good luck.



  48. Honest Adviser says:

    If that means me then yes, I do.

    Fortunately, I actually understand the product. I cant hold an account from where I live with any of the firms you mention. Even if I could they would be vastly more expensive as my bank charges $65 to make an overseas transfer. I am 34 and save money monthly so the free credit card payment facility is excellent.

  49. Debrilepe says:

    Well so far so good with this FA. He's not in S'pore, so we don't have the tax haven that S'pore offers, but I feel that he has been upfront with us from the start. I understand and am comfortable with the taxes we pay. His fees were made clear from the start, and are less than 1% of the assets we have with him. He was referred to me by the accountant we use in our home country, so I figure if the accountant uses him, he's likely OK. I'll give him the 1-year test, and if after that time, I still feel the same way, and he doesn't disappoint, then I'll post his name on your blog.

  50. Ceian Schmidt says:

    Thanks for the reply Andrew. Sorry I posted 2'ce, i thought it didn't go through 1st time so ended in 2 postings. I'll talk to the guy who called & see what he says. Feel like I understand a bit more after reading your blog. Will download your book and read it too. Thanks for trying to keep the public informed. BTW, hubby also posted with same question. Never done this blog thing before, & we thought didn't know how to do it. Not very tech savvy here, you know. HA HA HA

  51. biff says:

    Thank you Alfonso. I have been trying to track down who might be liable for the Axiom losses. My IFA, Platinum Financial Services in Hong Kong says not them. Their due diligence was based on Royal Londons due dilligence who relied on Caymen Islands regulators vetting of Axiom Fund. It appears all those levels of due diligence are all just smoke and mirrors. They were all misled by Axiom Fund. When the Fund was asked How are things going. The fox in the chicken coop said: all's just fine in here. When the last chicken was plucked, all the due diligence folks said Dear me, the fox was lying.

    I was sucked into the romance of "off-shore' investing.. Dowhat the rch are doing. Save money on taxes. My experience is: keep your money at home. pay your taxes and get on with your life. Its too difficult to beat the system..

  52. Juarez Barros says:


    I have just been offered an investment / retirement option by Global Index, with Friends and Provident International, as an expat working in the Oil & Gas industry, with money in the bank. I have no deep knowledge on investments options and have, to date, trying to invest my savings in the housing market in general. As per your comments, I see this is probably not the best option to my savings.


    Best regards


  53. Carrie says:

    Hi Andrew,

    I am in similar position as Gading, having paid Friends Provident $1500/month for 1 year of the 18 months, then upped my monthly premium to $2000/month, which renewed the 18 month cycle, and I have 6 months left. The total I have paid into it is $30,000. I hate to admit that I'm not sure I understand enough about the charges to do the math and figure out when/how I should pull my money – which is why I went with an advisor! I am a Canadian living in Jakarta – do you have any recommendations of who I could talk to who could advise me on how to proceed?

  54. Hi Carrie,

    Reading my book would be a place to start to understand why you would want to invest in low cost ETFs (indexes). I did my best to make it easily understandable.

    Then you could open a discount brokerage account in Singapore—without necessarily visiting Singapore. And you could manage it online…which would take just a few minutes a year, and is incredibly simple. Here's the Amazon link. http://amzn.to/millionaireteacher

  55. Rachel Gawith says:

    I am in similar situation. Invested with them 5 years ago, withdrew some of funds, remaining policy went into administration with management firm behind it, Friends Provident claiming I owe them thousands in charges and interest on these charges as they had not been paid.

    If I even get anything from the fire sale of fund in administration will be a miracle and then still left with Friends Provident claiming I owe them thousands,

    What to do????

    • Rachel says:

      So as an update it seems the funds that Friends Provident were selling via IFA’s were fraudulent but basically all the millions invested has disappeared. The guy is being investigated but we are looking at getting 5p in the pound back if that. And might take years. I have surrendered the policy so it does not incur any further charges (took months to actually get this confirmed), however I am still apparently in debt to FPI for over £40,000 for early redemption charge/fees etc.

      So my question – is it likely FPI would sue me to recover this as I refuse to pay them another cent, they have already cost me thousands and thousands.

      Where would jurisdiction be – I am resident in Bulgaria, British Citizen, FPI are legally based where??? IOM???

      Do I have a good claim to avoid these charges as the fund turned out to fraudulent, they made thousands already in commissions?

  56. Dav says:

    Hi Andrew,

    I have been considering investing in a savings plan with Royal London 360 (quantum plan). I was initially very enthusiastic about investing in this plan until I started reading some of the comments on this website.

    The fees I would be charged are around 1% plus the AMC charge for what ever fund I decide to invest in. Also, as some of your readers know, there is surrender fees if you want to withdraw your initial deposits (18 months worth).

    Would you consider the above structure to be unreasonable? If so what is the alternative? I notice Vanguard is only available in certain countries and I am currently an expat residing in South East Asia. Do you have any recommendations?

    Also – is your book available in electronic format?



  57. Keethan says:

    Ok, so this is pretty much a “others are bad, read my book” type of blog.

    1st thing 1st. When a regular savings plan is being signed, you should read carefully the page called “charges” and if you have any misunderstandings you should ask further questions.

    2nd. I no man’s world, an index will ever over-perform the equity market. So if you are chasing returns of 10%, you have to go towards other areas than bonds and indexes.

    It’s so easy to throw mud when you are selling crap yourself.

    Cheers !

    • Thank you for you comment Keethan. The first articles on this topic were published on this blog long before my book was conceived. Unfortunately, only those who sell these products appear disgruntled by these critical articles. I’m sorry if lifting the veil on these schemes has affected your income, but it was bound to happen.


  58. Rod says:

    Hi Andrew and all,

    I wanted to say thanks to you and the other contributors on this blog for the explanations on those nasty products – a necessary eye opener….

    Before moving on and closing permanently my plan (4 years into a 20 years Generali vision…) I just had a last minute question: is it possible / has anyone tried to convert or shorten the duration of a plan (for example 20 to 5 years) instead of purely shutting it done?
    I guess that is hardly possible considering the fees being paid upfront… But just in case someone would have tried that?
    Thank you,


  59. Jon says:

    Hi, great blog!

    You mention Vanguard and Vikers a bit in this blog.
    Though I currently live in South America.
    Any recomendations on where to invest my money.
    I have also just opened an offshore account with Lloyds.

    I am from NZ and am currently living and working in the South of Argentina (for the short term).


    • Hi Jon,

      It took me a while to find an answer for you. But let me know if this is helpful: : http://www.moneyweb.co.za/moneyweb-safm-market-update/r-1521

      • Jon says:

        Hi Andrew.

        Thanks for think link, it was really really good!!
        This is exactly something that I am after (Low fee diverse index funds)

        Though……It seems to be availible to people in South Africa.
        Is there anything similar that you know of in South America (Argentina).

        i.e. something better than me having to go down the FPIL route, where I can get a good offshore tax friendly investment and not lose out on fees.

        Cheers & Thanks again.


        • Hi Jon,

          Regardless of where you are in the world, you could build a portfolio of low cost exchange traded funds via TD International, based in Luxembourg. Here’s the link: http://int.tddirectinvesting.com/

          • Jon says:

            Hi Andrew, Thanks so so much for the info, I have been looking into it! Cheers!

            So…from the Blog, I am guess you don´t like these kinds of products, Is that correct right?

            For example: to name the major ones (just been doing some reseach) :)

            – Royal Skandia (MSA/MPA)
            – Friends Provident Int (Premier & Ultra)
            – General Int Visions (External Fund Investments)
            – Hansard Intl (Aspire)
            – Royal London 360 (Paragon & Quantum
            – Zurich Vista III (Mirror Fund Investments)

            Some of these products in my opinion seem to be quite ¨”good products”
            i.e. options to invest in a number of funds in a tax friendly environments, where a normal everyday person would not have that option etc….
            Though the BIG question mark is the FEES.

            So for a regualr saver i.e $500-$700 a month you would stay totally clear of all of these (just to be 100% sure).

            Cheers again Jon.

          • None of them are good products unfortunately Jon. There are many other tax friendly options available to expats. And being able to move from fund to fund “for free” only looks like a privilege when the respective company gouges investors on everything else. Why should switching funds ever cost investors money? Ever? I chuckle at the way they promote this.

  60. Luis says:

    Dear Andrew

    I am desperate and I need your help. I have an investement in Royal London 360, I am trying to wthdraw my moment due to sensitive personal reasons and I have been told that I cannot withdraw any money until I finish my initial period which will take place in March 2014. I would like to know whether this is true or it is only a tactic to keep me with the investment during some time.

    This investment is in mutual fonds.

    I would like to know how eary is to cancel the investment, if there is a time where this can be done easily. Any support advice?

    Thank you

  61. Plan Holder says:

    Although your analysis is correct on the face, your conclusion is flawed. Freinds Provident investment plans do have there value for some expats. For example, if I work for BP and am paid in dollars, but receive my bonus in pounds Friends actually will save you money if you are using multiple currencies. Where as having to wire and convert you currency all the time generally will cost you 5% off the top every single time. So … your analysis although correct that they do charge a much higher rate than Vanguard for example is true, it doesn´t mean you would make more money in the long run as you suggested with your comparison.

    • Plan Holder

      Let me give you an interesting example. Imagine two investment firms.

      One firm actually gives you a 50 cent bonus for every dollar you invest. In other words, they provide a 50% bonus every year on the money you deposit. Imagine this firm charging fees of 1.5% per year (less than half what someone would pay with FP)

      Imagine a second firm not giving any kind of bonus, but charging investors just 0.2% annually to invest (baskets of index funds would cost this little).

      If they each invested $10,000 per year, but the employee at firm one had a $5000 bonus added every year by the employer (a 50 cent match on every dollar invested equals a 50% bonus on the deposits) then which which investor would have more money after 40 years?

      Ironically, it would be the investor without the 50% annual matching contribution. Your currency wiring example of 5% is relative peanuts, of course. When doing the math, you’ll recognize that the biggest drag (or perk, if it’s in your favor) is the annual expense.

      To play this scenario yourself, try the compound interest calculator and http://www.moneychimp.com

      I’m actually going to use your example in my next book (which I’m currently writing) because many people confuse percentages saved annually (or bonus percentages given) with ongoing account fee costs.

      I can see how you would do such a thing. It’s a total paradox, revealed only when you actually do the math.


  62. antoine says:

    Hi Andrew,

    It seems that you have access to investment platforms that are totally free of charge.

    Can you please tell me which one you use?
    Do you use Vickers?
    Are you sure there is no fee?

    I am extremely interested

    I live in Thailand and I have no access to Singaporean Banks

    I am considering an FPI saving account.

    What I don t understand is that there is no establishment charge.

    Thanks in advance for your answer

    • Hi Antoine,

      There are fees associated with all investment platforms. But nobody should ever have to pay establishment fees. That’s silly stuff.

      With DBS Vickers, you would pay 0.35% commission to make purchases, and the internal costs of the ETFs used could be as low as 0.2% per year.

      Let me give you an example of why you should reconsider a FP account.

      While each ILAS Pension Provider has subtle differences, most allure investors with the promise of loyalty bonuses.
      To dramatize an example, I’ll introduce you to a hypothetical bonus platform that’s far more generous than anything offered by an offshore pension plan. It’s going to look appealing, but don’t be fooled.

      Here goes:

      If you invest with Hallam’s offshore pension, we’ll guarantee a 50 percent bonus on each cash deposit. In other words, if you invest $10,000 each year, we’ll chip in an extra 50 percent, ramping your invested proceeds to $15,000 per year.
      Annual management charges are just 1.5 percent per year. How can you lose when receiving a 50 percent annual bonus?

      In the fantasy broker scenario above, I haven’t included costs of the actively managed funds. If the fund expenses added another 2% per year, total costs for the account would run 3.5 percent per year (1.5% for the management fee plus 2% for the fund expense ratios).

      Still, that 50 percent bonus appears to trump the comparatively small 3.5 percent annual account charge.
      Keep in mind, no ILAS firm offers a 50 percent bonus every year on annual deposits. But even if one did, investors would still be getting fleeced. Deception with numbers is an art. Not receiving a bonus, but paying just .02 percent in annual fees, would reap far greater rewards.

      Here’s the fantasy bonus pension alongside an indexed portfolio:

      Investor Has $10,000 Per Year To Invest
      Fantasy Offshore 50% Bonus Pension Versus Low Cost Indexed Portfolio

      Assume Global Markets Average: 10%
      Amount Annually Invested By Client $10,000
      Annual Bonus Paid On Deposits 50% for the fantasy pension; 0% for the indexed portfolio
      Total Annual Amount Invested After Bonus $15,000 for the fantasy pension; $10,000 for the indexed portfolio
      Annual Fees Paid On Total Portfolio Value 3.5% for the fantasy pension; 0.2% for the indexed portfolio
      Annual Returns After Fees 6.5% for the fantasy pension; 9.8% for the indexed portfolio
      Total Portfolio Value After 30 Years $1,379,838 for the fantasy pension; $1,739,129 for the indexed portfolio

      To be clear, no offshore pension provider offers a 50% annual bonus on deposits. But even if one did, the investor could still end up hundreds of thousands of dollars poorer.
      Bonuses offered on money deposited or promises of free money transfers are about as appealing as Arthur Miller’s character, Abigail Williams, in the classic play The Crucible. While pretty on the outside, her hidden soul wrapped ropes around innocent necks.
      While high portfolio fees won’t end your life, they can make retirement much less pleasant.

  63. JohnS says:


    Successful you may be but I am dumbfounded as to why you have taken it upon yourself to give financial advice here on this blog. I am also shocked that people actually come on here and ask for your opinion. You are/were teacher, and to my knowledge, not a qualified and regulated Financial Adviser. Yes, there are fees involved in offshore products, some more so than others, but there is a trade off. The point of a savings plan is to save; the average Joe Bloggs does not have the capacity nor intention to do so, therefore having a disciplined contract over a set time frame provides them with this. Further, I see comments on here about fees and exiting early. If you are transparent (as a Financial Adviser) and explain that the offshore savings plans alluded to are to be treated as a pension, only have the flexibilities added in case you find yourself not being able to keep up for a period of time, then there is no issue. People who ‘want to save for a short while’ then complain because the Friends Provident contract means they have to keep funding until the end, are they type of people who will fail and fall well short of their retirement goals. Do you join a company pension scheme for your 15 year career at a multi-national company and ask your HR Manager to stop putting a portion of your salary in to your pension scheme because you only want to save every so often on your terms? Please! I have worked in the offshore market for some time and I am clear and transparent in the way I explain fees. I have yet to find a client who has had a long term savings plan mature (REGARDLESS OF FEES) and honestly tell me he/she would have saved more had he done it their way. It’s not about what you can net, it’s about what you physically put away over 15-20 years etc. Ask yourself this question people. Are any of you that disciplined you will set up a standing order for 15 years from one bank to another, take the time to invest the money in the poor fund selection your bank provides and constantly manage it? If the answer is yes then don’t bother with an offshore savings account but don’t come on here for financial advice either.

    • Thank you for your comment John.

      Where you see a pension, I see a high commission trap. No respectable corporate pension in North America charges 3.5% per year. Instead, their internal charges run half a percent or less. In Britain (where I believe you are from) these private pensions are fleecing investors silly. You can view a BBC Panorama documentary about similar products here: http://www.youtube.com/watch?v=pc-gGmBcG78

      You’re selling a racket costing at least 3.5% annually including internal fund costs. If global markets average 7% and inflation averages 3.5% (which is lower than the past 40 year average) then your investors won’t make a penny, in real (after inflation) returns including fund management costs. But selling such platforms serve your needs, and your corporation’s needs. Over a working career, somebody investing $3000 per month into such a platform will have less money than somebody else investing $1000 per month into a far cheaper and more ethical platform. You might be a good guy who doesn’t recognize this. On the other hand, you may understand how devastating such fees are over time and have rationalized for a massive paycheck. If that’s the case, you may eventually wrestle with your conscience. I hope the better half wins. You don’t have to sell these things John. You could set up a business to charge 1% per year on assets, build ETF portfolios for clients, and work with them every quarter on a goal setting process. Play with a compounding interest calculator, and read a Nobel Prize winning economist’s study in, The Arithmetic of Active Management. http://www.stanford.edu/~wfsharpe/art/active/active.htm

      You may make a decision, eventually, to serve. I hope so.


  64. Julius says:

    Hello Mr Hallam, I’m working with MetLife based in Dubai, I was wondering if you could give me your email so I could forward a sample policy to you w/c I normally provide to my would be clients. I just wanted to know if I’m providing a great product for my clients. It’s a life insurance combined w/ investment. I would really appreciate your input. Thanks

    • Hi Julius,

      From U.S. sold variable annuities to the offshore pensions offered by groups like Friends Provident, I’ve never seen an investment combined with an insurance policy that makes any mathematical sense. They pay high commissions to brokers, but because of their high fees, perform poorly. Including expense ratios and platform costs, your clients are paying roughly 3 percent per year. For those hoping to make money, these products are extremely inefficient.

  65. Imagine a “financial advisor” selling investment linked assurance schemes to 185 people in a single month. Well, here’s a guy who appears to have done just that…and he seems to be proud of it: http://andrewhallam.com/2010/11/beware-of-zurich-international/

  66. Fatima says:

    I’m in UAE and i did the frends Provident Int. At the beginning, they told me that afre 17 month, i can withdrawal all my money. i have alredy save 9000 Dollar now i want to cancel and take all my make back. But now the told me i need to pay penality and it is better to not cancel. Do you know how much should i pay for the penality???

    • Hi Fatima,

      Unfortunately (as is often the case) they lied to you when you started the investment policy. To find out what the penalty would be, you will have to ask the person who sold you the product. And after you get the number, be sure to tell the person that their mother would be ashamed of them for misleading people…and costing them money, just to earn a fat commission.


  67. A gullible Devere/FPI Client says:

    Hi there Andrew.

    Thanks for your website and all the advice you’ve provided (as well as the discussion opened up via the forums)- I am currently a down-hearted client of the Friends Provident Premier Advance plan, as sold to me by DeVere.

    After reading through the comments and trying to understand them as thoroughly as I can, I know I want to leave.
    However, my only confusion is when!

    I’m currently 10 months into the 25 year plan.
    As mentioned before, there is a bonus for the first 18 months.

    So far I have invested $5430 dollars, and am currently still sending $543 per month.

    If I leave now, I lose it all, but stop sending good money after bad.

    As you know, with every year that goes by the surrender charge reduces, but I’ll have put considerably more in.

    The alternative that I can see is to try to change my monthly payment so that it’s the lowest possible, and wait until the surrender charge/total means I’ve broken even (how likely is that?). I’m not even sure it’s possible to lower the amount per month during the first 18 months.
    The other thing I’ve heard about is making it ‘paid up’ once the 18 months are done, but I’m not sure what this involves, and whether the subsequent charges would simply make the money dwindle into nothing.

    If I choose to stop paying them immediately, do I have to notify them of this? Or can I just stop the SO from my current account?

    I’d love to hear if anyone knows a decent advisor who could help me set up decent long and short term investments in ETFs, as I’ve heard so much praise for them.
    I am British, and in my mid 20s.

    Thanks in advance!

    • Devere Client,

      I think you’ll have to speak to your advisor and see what the redemption value would be at different stages. Only then will you be able to make a decision about what to do next.

      By the way, when you signed up for this policy, did the advisor make it clear what you would pay if you bailed out early?


      • A gullible Devere/FPI Client says:

        Hi Andrew thanks for your quick reply!

        I’m ashamed to admit this; I was naive and gullible when it came to signing up to the financial products that my advisor gave me- whilst I’m normally savvy when it comes to finances, my guard was down as I considered my advisor to be a very close ‘friend’ for a couple of years before we had a financial meeting.

        Looking back through the documents I signed, the details of the surrender charges at each year are indeed listed, as well as many of the charges (I’m not sure all those mentioned on this forum are apparent, but certainly some of the main ones).
        I was simply sweet-talked into glossing over the negative aspects of the contract (the assumption being that I would carry out the full term, therefore the surrender charges seeming to have less gravity than they really should have), whilst the positive aspects (favourable projections for the amount of money I’d receive at the end of the plan, as well as the 18 month bonus) were highlighted.

        The surrender charges in my case are as follows:

        Within the first year, 100% surrender- this is what I’m seriously considering.
        From the 1st to the 8th years, the surrender value is 93% decreasing by 3% each year.
        From the 9th to 11th years it then drops by 4% each year (from 68% in the 9th year to 60% in the 11th year)
        From the 12th to the 19th years it then drops by 3% again each year (from 57% in the 12th year to 36% in the 19th year)
        From then onwards it drops 6% each year from the 20th to the 24th year, (from 30% in the 20th year to 6% in the 24th and final year)

        Earlier on in the contract it gives projection values as to what the surrender value would be assuming an annual growth of 7% after deduction of fees and charges, and assuming I still put in $543 per month (if I was to carry on I would instead try to find out what the minimum amount I could invest would be, which would affect the projection).

        The surrender values based on those assumptions are as follows:

        From the 1st year onwards:

        1 – amount invested ($) = 6,516, surrender charge = 384
        2 – ai = 13,032, sc = 4,156
        3 – ai = 19,548, sc = 11,368
        4 – ai = 26,064, sc = 19,546
        5 – ai = 32,580, sc = 27,861
        6 – ai = 39,096, sc = 36,735
        7 – ai = 45,612, sc = 46,208
        8 – ai = 52,128, sc = 56,321

        I feel as though the fund would have to perform extremely well in order for me to get out without losing any more of my cash.
        He’s invested me in mirror funds- mainly in Jupiter Merlin international, but the rest in umbrella funds for companies in Korea, Thailand, Japan, and finally a global property fund.

        What would you suggest?

        Many thanks again in advance!

        • Hmmm, that does look pretty rough. Unfortunately, I can’t give advice. The Monetary Association of Singapore has received complaints about me from the advisors that sell such products. I’ve been asked not to provide any opinions online, nor am I supposed to suggest what I would do in your place. I understand I’ve hurt the revenue (of offshore pension sellers).

          But here’s something you could think about. Costs for this platform will be roughly 3.5% more each year than a lower cost platform would. Use a compound interest calculator at http://www.moneychimp.com to plug in some different rates of return: perhaps using 8% in one scenario and 4.5% in another. Play with some different time periods to see how long it would take to recoup any money lost. For example, assume you had a $50,000 investment, and that you would only get back $30,000 if you pulled out. Compare how $50,000 would grow over 25 years at 4.5% per year, versus $30,000 per year at 8% per year. How long would it take for the lesser figure ($30,000 in this case, growing at 8%) to exceed the value of the $50,000 growing at 4.5% per year. Play with your own specific variables, and please share what you come up with. My apologies for not being more helpful. I would like to be of more help, but I cannot.


          • You’re right, that was pretty hard core, and to be honest, I’m not sure how much it added to the bottom line. It didn’t take me too long to figure out how crazy that was. It makes me chuckle when I think about it today.

  68. Andre Erasmus says:

    Dear Andrew

    It is with ineterst that I read these posts on your website.

    I have twice written to Friends Provident previously, but have never received a reply. Not even a confirmation that my concerns were received.
    Needless to say – deeply disappointed. I have read the above comments and it seems that there are other people out there who have also been scammed by Friends.
    I was duped by an “advisor” from deVere in Thailand in 2010 into entering into a policy to top up my inevestment palnning. My monthly contributions being $1,000. I have now been informed, however, that the policy’s actual value is almost zero. All my contributions have gone to “administration fees.” And, I was told, that this is normal. After around 12 years, I might actually break even! $48,000 for administration fees in 4 years???? Unbelievable!
    Now, I am not a financial expert and I was told by the broker from deVere that FP is one of the safest funds available. Like an idiot, I believed him. I was never informed that over 80% of contributions are swallowed up by “administration fees” Really??? He informed me that I simply have no choice. I can stop payments, but then I will lose everything I have “invested” in this scam.
    I fully understand and appreciate that a small percentage of contributions go towards administration fees, commissions, etc. However, to now be informed that the first 10 years of contributions are solely for this sounds impossible. Have I known this before, I would have obviously never been tricked into this investment scam.
    Is there honestly no option for me at all? I have tried discussing this with the brokers before, but they only try to pressurize me in taking out additional policies or increase my premiums (of course, these will only go to admin fees). I have and will continue to warn all my expatriate friends and colleagues against both the deVere and Friends Provident scam. despite being this being third time I write to you. But, I will continue to do so and also contact as many people as possible in an effort to somehow get some of money back from this scheme.

    I know: “a fool and his money” and, I feel like quite an idiot have been taken for such a ride. But, do you have any advice for me to possibly get some of money back?


    Andre Erasmus

    • Hi Andre,

      One of my latest blog posts is about a guy who got his money back. I am surprised that your value would be nothing, upon redemption. Also, an entire decade’s worth of payments won’t go towards fees (not even with a Friends Provident platform). So your situation does sound a bit fishy. I suggest you document all email contacts (or otherwise) that you have had with the advisor, then go directly to Friends Provident with the issue. Your advisor doesn’t work for Friends Provident, but receives massive commissions from them to sell such products. Good luck, and keep me posted.


      • Bart Versteijnen says:

        Dear Andrew,
        Just read your reply to Andre in where you mentioned you wrote about a guy who got his money back from Friends Provident.

        Could you tell me how and how much of his initial 18 months he got back and what his circumstances were?

        I have a FPI Premier Advance with USD 27000 paid up in 18 months. Although my statement says the plan is now worth USD 40500, that is just the USD 1500 x 18 months plus the 50% extra (USD 750) that they give you as a ‘bonus’.

        Going through my statements I see lots of charges on each fund but apart from the bonus my plan has increased in value a total of 0% after 18 months. My Devere guy did explain the 18 months as crucial in the sense that I would need to contribute 5 years to ‘keep’ the bonus but it is only after cleaning up my papers that I sat down and read through the policy only to learn of the surrender fees. This has shocked me to the core- while planning for the future I find out I have made the worst financial decision of my life and I am ready to do what it takes to get my money back in full.

        I did read that the FPI Premier Advance out of Isle of Man is titled a ‘Savings Plan’ and I am thinking that as savings plans go, one should be able to take the money out. Surely is there a lawyer out there who could look up the definition and maybe sue on this bases? Also, if it comes to that, in which jurisdiction should a case be filed.

        I called my Devere guy who explained he had ‘explicitly gone over this with me a number of times’ and said that the money is still there and not ‘effectively gone’ as I would call it when I cannot use it now and do not know if it will still be there in full after 20 years. He said it is a pension plan with me in mind and to keep contributing. I can’t because I will not contribute money to a company with these terms, I simply can’t override and ignore my gut feeling that this is wrong.

        I’m devestated and feel my money is in prison and I would need someone who could make a calculation forecasting what is the best option: A contribute the minimum term of USD 300/month to term and withdraw USD 900 quarterly to get it back (note the penalties for reduction in the policy), or B stop contributing and let FPI surrender it automatically (this happens when no payments are made into the plan) or C surrender now and cut my losses and lose 90% of my hard earned cash.

        I feel these kind of practices should be forbidden and those responsible locked away.

        Please Andrew or anybody out there if you know of a loophole out of this one, please do share it on this forum or email me direct [email protected]

        Thanks in advance and best regards,
        Bart Versteijnen

  69. JW says:

    I narrowly avoided buying one of these from a financial advisor in Dubai. I did a similar analysis and came to the conclusion the fees were outrageous and gave it a miss. Unfortunately some of my colleagues at the time weren’t so lucky…

  70. philip says:

    Just to point out the Friend Provident International (IoM) appear to be crooks.
    They work through dishonest IFAs who rarely disclose any of the fees or penalties.
    The IFA and FPI conspire together to rake in the highest fees while no allowing you any real information.
    My IFA (an out and out crook) invested my money in whatever paid him the highest hidden fees.
    Many of the companies have gone to the wall.

    The money I have left (about 1/3 of my pension) I cannot get any details of how or when I can transfer it out.
    FPI care completely uncooperative, and refesed to give direct answers on when or how I can transfer my money out without penalty.

    If you use any IFA who suggests using FPI, he is a crook trying to steal your money.
    If you manage to invest in FPI directly, you need mental help.

    Really, these guys are just crooks.
    How they can live with themselves, stealing from pensioners, I just can’t understand.

  71. Thu Dang says:

    Hi Andrew,

    I bought the Friend Provident policy in 2010 in Malaysia, without reading carefully the fees section. Now I live in US, and want to surrender the policy. I just re-read the policy and found out that the fees are too high, and I can’t get all the money back. I would like to ask if I surrender now, accept the surrender value, can I claim losses in US tax?

    Thanks, Thu

  72. Wololo says:

    For people who stumble upon this blog looking for information related to those ILAS schemes, in particular Royal London 360, I have written a tool that people can use to compare the RL360 fees with their “other” investment platform. This gives a clear view of the actual fees, and numbers. You can calculate how much you would get out of the plan VS your other investment platform, and, maybe more importantly, it can also simulate a “leave now and take a loss” scenario to see if it’s worth stopping your plan in the middle of it.
    The tools should be flexible enough to be able to compute other ILAS values as well, I believe:

  73. Mark says:

    I would add a few additional points to just reading the “fine print”… after all it is your money we’re taking about here!

    – work out the costs in excel (compute how you understand it will be charged and have it verified by your advisor) if they struggle to explain this then walk away.
    – Validate this against what existing clients are seeing on thier statements.

    There are additional advantages to these types of scheme in the tax treatments they recieve from certain national authorities, but you should still ensure that the fees being paid and the favourable tax treatment recieved make sense over the life of the scheme. In the posts above I can see alot of big fees being quoted therefore I’d also recommend you negotiate. These policies are available from a wide number of advisors, get 2 or 3 on the case and play them off against one another to drive down the fees. (be prepared to walk away)

    The scheme we looked at was a lump sum policy, 0.85% for 8 years as a fee for the product (this is based on the initial contribution, not the raising market value of the fund) a flat admin fee of approx 500 USD per quarter (indexed for inflation…let’s see how that is treated in these deflationary times!) and thats it. Advisors will offer thier Portfolio Management services for and extra 1% etc.. this advise can be obtained for free elsewhere.. and if you select right you shouldn’t need to change that often. think Macro!

    Our evaluation focuses on the favourable tax treatment given to proceeds from life policies which would not be the same as an outright investment in funds (unlike the case which the article outlines)

    The other thing to watch on asset allocation within these funds…some will offer advisors (not you…the guy you’re paying) kick backs to invest money with them, do your homework on the funds that are being recommended to you as it is not uncommon for there to be one recommendation in there which is being “incentivised”. (Stay away from new startups in unproven sectors with complex org structures (but that’s common sense, right?)

    There are all sort of these schemes out there make sure you are doing it for the right reasons and do the numbers yourself before parting with your cash, join and investment club or use your network to validate schemes you hear about because it’s important to compare like for like. generally the fees on these schemes are high and there needs to be an additional benefit as opposed to buying the index directly (eg. Vanguard ETF’s) if it’s not there, don’t do it.

    Good luck.

  74. Craig says:

    I have a friends provident premier plan through devere. After reading this and other websites I contacted Devere and asked about the charges involoved. They contacted friends provident and FP came back with, my investestment only needs to make above -0.06% over the life of the plan (25 years) to break even and get my money back at the end. Yes that a minus sign there. This is due to the bonuses that are part of the plan.
    How can that possibly be true?? I’ve read through my contract a few times and the only fee actually in numbers is the 1.2%. where are you getting that the plan works out above 3%? It mentions other charges but nobody says if or how much these are.
    Any help/information anybody can give would be helpful.

    • Craig,

      You need to also count the expense ratios on the funds you own. You are likely paying at least 1.8% per year on those. So that puts your annual costs at 3%. I believe the Friends Provident Premier plan also has hefty fees for the first 18 months. All told, I believe you are going to pay roughly 9% in annual fees during the first 18 months of your plan.

      • Craig says:

        I’m 4 months in and will be cutting my losses then, I will lose every penny already invested but it seems like the best thing to do.
        I will bring up these charges when I speak to devere and friends provident and see what they say. Can you break that 9% down into more detail so I can have plenty of comeback when they try and sell it to me again and stop me leaving?

        Thank you for your time Andrew.

        • Craig,

          Here’s a quoted section from The Global Expatriate’s Guide To Investing.

          Steve warmed to a representative selling a Friends Provident scheme. Describing the perks, the representative told Steve he could earn loyalty bonuses after the 10th year. He also said Steve could switch his money between funds at no extra cost, and that the money would grow tax free, offshore.

          Steve felt confused by the advisor’s explanation of the pension’s inner workings: a percentage in fees taken here, a percentage taken there, reduced costs here, bonuses gained there. It looked messy. But Steve trusted the advisor. “I was really proud of myself for setting this up at first,” he said. “But I wish I knew then what I know now.” 12

          Steve’s money was invested in actively managed mutual funds, costing an average of 1.97 percent a year. Not only was he paying high costs for the funds, but his first 18 months of savings will bleed for 25 years.

          Steve invested $9,266 during the first year and a half. His Friends Provident Premier Advance plan charges 7.2 percent annually in fees for the first 18 months. External mutual fund costs deducted an additional 1.97 percent per year. As such, during his first year and a half, he paid gob-smacking costs of 9.17 percent annually. 13 Even if Steve’s investments had made 9 percent a year (before fees) during this 18-month period, Steve would have lost money.

          As stated in the contract, Friends Provident would reduce Steve’s annual charges by 6 percent on all deposits made after 18 months. But he’s stuck paying costs of 9.17 percent per year for 25 years on the first $9,266 he deposited. If the money Steve invested during the first 18 months made (before fees) 9.17 percent per year for 25 years, it would match Steve’s investment costs. His initial $9,266 becomes a corporate Dracula’s drinking fountain.

          Some people donate to charity; others give to family. Few place financial firms on their philanthropic lists.

  75. Charlie says:

    Hi all,

    It seems like deVere Group’s lies are catching up.
    The worlds biggest Ponzi scheme has been busted. Just google Belvedere, run by Kobus Kellerman.
    They had Billions of investors money. Turns out that the CEO of deVere was close to Kellerman and they sold funds to deVere clients.

    Tick, tock…

  76. Edgar Velez says:

    Hi Andrew.

    I have never feel more insecure in my life than now reading your post, I have put a big part of my savings in FP, I work in the oil industry and the panorama today is gray and blurry in the last months I have been thinking the deal with FP is not giving me something to leave after my retirement (I’m 37 and start at 31) and I would like to know what options do I have, I really don’t know much (or nothing) about finance, investments and so…

    I saw people on my company buying houses to rent, some other invest in stocks or create their own personal business and I thought I do my right choice but as I said I can be more insecure now.

    All the best and thanks for the eyes opener


  77. mark says:

    You mention the 101% return in the event of death (cash-in value). After that section in the policy it states cash:

    Cash-in value
    Your plan may be cashed-in at any time for its current
    bid value less an early cash-in charge and outstanding
    establishment charges in the first five years.

    Is this cash-in value different to the death cash-in value, as under this section it mentions bid value, which would include gains incurred during the life so far of the policy.

    • Hi Mark,

      If you died, your heirs would receive the value of the account, including any profits. If the account value was less than what you deposited, upon your death, your heirs would get one percent more than what you deposited.

      If you are alive, and you cash in, you will face heavy penalties (up to 80% of what the account is worth) if you cash in before the policy has expired.

  78. Darren says:


    We are taking our money out of FPI that can be taken without penalty and putting it into our TD Direct account. I noticed that you recommended some funds for those people who have their money stuck with Zurich. Which funds do you recommended for the money that will remain with FPI? I am seeing their “advisor” this week and would like to be able to tell them which funds I want.

    • Hi Darren,

      If you provide me with a link to all of your fund Friends Provident fund options, I can have a look.


      • Darren says:

        Thanks for the quick reply Andrew,

        This is what I currently have:

        P58 Templeton Bric (10%)
        J30 JPMorgan India (20%)
        P60 LeggMason Martin Currie Global (10%)
        S112 Jupiter Global Financials (10%)
        S114 Jupiter Merlin International B (50%)

        The above Jupiter Merlin Fund used to be in this one but has recently changed. To be honest I’m not entirely sure why.
        S258 Strategic Growth Fund (USD)

        Here’s a link to see the funds available with Friends Provident. My funds are with Isle of Man:


        At TD Direct I am now currently holding VSB, VXC and am planning to purchase HXT or VCN this month. Am I on the right track??

        • Darien says:

          Hi Darren,

          Let me guess, you live in the Gulf and were sold this fund by Devere, right?
          I can tell, because the funds that start with an S (Jupiter, Strategic Growth Fund) are funds that Devere developed themselves.
          S258 went up in flames. Its alleged that the worlds biggest Ponzi scheme was responsible for it and Devere may or may not be involved.
          Just google Belvedere Fund/Devere/Kobus Kellerman.
          It is very dodgy.

          I got out of these with a kick in the teeth after finding Andrew’s blog and then buying his book.

          Take the hit and get out before more funds are suspended.

          Take care, D

        • Hi Darren,

          I haven’t given up on this task. I’ve been very busy with my columns. But I’m tackling your question now, and I should have a blog post up in a couple of weeks, with respect to what kind of portfolio construction you may want, with Friends Provident options.


  79. mark says:

    Hi Darren,

    I have done something very similar to you. Be careful though as the money you have left is likely to be incurring the most fees so you will likely need to be earning +10%PA in order to break even (with inflation).

    I am going to use my ICP – which would be lost if I removed it now – to invest in high risk index funds and when it gets very low, I will move it all into gold and let it sit there until such time the market starts to fall and gold increases.

    I’m no financial guru, this is just my thoughts and plan. After all anything I recover from this account in 20 years time will be a bonus.

    • Darren says:

      Hi Mark,

      Thanks for your response. Which “high risk index funds” should I be targeting. Would you suggest Mark’s approach Andrew?

  80. JackJ says:

    Hi Andrew,

    What would you recommend for a global bond index in the market today? Preferably a main trading currency of USD but not on one of the US exchanges.

    Thanks again.

  81. Ian Carter says:

    Good morning Andrew. We where sold an investment by de vere in dubai (PIC) in 2007 , the financial advisor sold us an investment that was run by a company called castlestone which friends provident was the conduit for. Our investment matured this year with a loss of 90% even though the investment was sold with a 8% stop loss against any downturn , this bond was withdrawn without our knowledge , we had a e mail from a freelance lawyer acting on behalf of de vere in dubai. Saying that all the paperwork / bonds have not got de vere letter headings and that we should engage a lawyer and go after castlestone In the e mail the lawyer stated that he can’t prove in writing but is aware that castlestone have paid monies back to investors , have you got any. Recommendations re our situation , surly if nothing else de vere and the financial advisor have got a duty of care , this is the only time we have invested money and we relied heavily on the de vere guidance which with hindsight has been exploited for there own financial gain . Also castlestone did not even attempt to move the money around the aliquot portfolio. Regards Ian

    • Hi Ian,

      I am so sorry to hear about this. How much money did you invest? Whether you go after it, or not, I suppose you have to look at the long term financial impact on you, as well as the emotional impact. I do know a woman who got a lawyer and went after Friends Provident. I can’t give you her name, because Friends Provident signed off with the stipulation that nobody would find out about it. If you have lost a significant sum, go after DeVere. You trusted your money to them. If you lost a significant sum, it could be worth fighting for. Just be aware of spending more on legal fees than the issue may be worth. And always remember the emotional impact.

      Ian, please keep me posted on what you decide. I really hope you can lean on DeVere hard, and get something settled simply.


  82. Charlie says:

    Hi Ian,

    I also got lied to by deVere. Was the freelance lawyers name Colin Barr by any chance?
    I was recently contacted by a former deVere guy who told me how crooked the company is and that clients money is put into deVere owned funds.

    Best of luck with whatever you decide.

  83. Ian carter says:

    Morning Andrew
    Thank you for your reply , we invested 135,000 U.S. Dollars which was sold to us with the 8% stop loss guarantee by devere consultant / professional financial advisor . We have been in contact with devere over the last 5 years and just get the go away pill not our fault hiding behind paperwork. Andrew I am not bitter about losing money on the investment that was our risk. (8% stop loss of the 135.000 U.S. Dollars ) what is upsetting is ,the amount it is worth today is 15,000 U.S. This was a major sum of money that was going towards our pension pot . We placed 100% trust in the advisor who was installing confidence by using the de vere brand name as a reassurance support to ease our concerns due to our nativity when investing money .wold it be possible to guide me towards a legal team that have got the relevant professional exsperiance in handling such matters please. Regards Ian

    • Hi Ian,

      I don’t know of any legal teams, personally, with experience in these matters. But if you find one, could you share the firm’s name? Others could benefit from their services as well.


  84. Ian carter says:

    Hi Charlie , that is correct. How did you got your situation sorted?



    • Charlie says:

      Hi Ian,

      Unfortunately I cut my losses. I was mis-sold a 25 year plan. Mis-sold sounds like a strange word to use, but the ‘Advisor’ left out so many details, it was a joke. 50% of my funds were in the Strategic Growth Fund. The fund went bang. I lodged many complaints with deVere locally. Eventually I mailed their legal team in Malta and their lawyer came back to me basically saying that they did nothing wrong. I have also recently raised a complaint with the DFA in Dubai and am awaiting their response. It is very difficult to win against these guys. I tell everyone I know to avoid them and recommend Andrews book, perhaps that is my way of winning. Take care.

      • That’s frustrating to hear Charlie. I’m sorry that happened. I guess the best we can do is educate others. Keep spreading the word about these offshore rackets….especially if you’re still in Dubai. These guys love grab expats working in the Middle East.

  85. Francis says:

    Hi Andrew,

    I am just reading through your book at present and beginning to realise that I have made some very poor investment decisions.

    I signed up to a 25 yr Zurich Vista plan in the Middle East in 2009 paying 1350 USD for 18 months now reduced to 300 USD. Details as follows:

    Current value USD 41,797.94
    Surrender value USD 19,298.18
    Maturity date 30/09/2034
    Total regular premiums paid USD 36,940.00

    The biggest problem I have is finding a reliable financial advisor over here in the Middle East as they are all trying to sell products and I firmly believe they do not understand the charging structure of these policies anyway.

    What to do? Escape from the policy now or stay in and hope I can recoup my IC at expiry? Appreciate you can’t give specific financial advice but general feedback would be welcomed.


  86. Ian Carter says:

    Hi Charlie Will be interesting how the DFA view this The world is getting smaller and the legal net is getting bigger. We just need to be patient and find the the right lawyer Because there is one out there. These big brands should not be able to advise on such important issues and just take there fees with no consequences. Please keep in touch. Regards. Ian

  87. Michael says:

    Hi Andrew, Just got your book! I wish I had seen this website a year ago! I invested with Devere with Premier Advance, paying in 500 USD a month in May 2014. I have split my money 2 ways , with Vanguard US 500 and Value Partners High Dividend. I know one is being switched tho. What do you suggest I do? The surrender value is a few hundred dollars at the moment. I just didn’t know their fees were so high. I would appreciate any suggestions. Thank you for your time. I live in the UAE and I am from the UK.

    • Hi Michael,

      For starters, stop contributing money as soon as possible. Whether you keep it in there or not is your decision. My book described a calculation (chapter 6) that you could do to determine whether you should take the hit (and withdraw what remains) or not.


  88. Alejo says:

    Hi, I m looking to open an off shore brokerage account in Channel Islands, I want to invest on financial assets (not insurances, not pension plans) like auto-call notes and other structured notes, but Im not sure what is a good entity there to do this. I was offer to open with Royal London 360 or Generalli, do you know if these are trustable institutions?? annual fees are between 1% to 1.5%? is this ok or do you know other good brokers with lower fees? Thanks!!

  89. Alejo says:

    Thanks Andrew..
    I m not american citizen, do you know if I have to pay local country taxes when operating when using these companies? is any of them “off shore”?

    • Hi Alejo,

      You would not have to pay capital gains taxes if you live in a jurisdiction that would allow that. Tax-wise, the treatment is exactly the same as it would be with a Channel Isle firm. You could open an account with Saxo in Singapore, or TD Direct International, based in Luxembourg. Neither jurisdiction charges capital gains taxes. Both types of accounts could be opened without having to visit each respective country.

      My book shows you what to buy: http://www.amazon.com/The-Global-Expatriates-Guide-Investing/dp/1119020980


  90. Adnan Sami says:

    I have a query about the “Initial Charge” which applies on the “Initial Units”. I have Friends Provident “Premier” policy. I started with USD 500 per month contribution for which the quarterly “initial unit charge” was about 110-120 USD (USD 440-480/year). After a couple of years I increased the premium to 1500 USD per month so accordingly, due increase in the “initial units” the “initial charge” also went up to about 350-360 USD per quarter (about USD 1400/year). This increased premium lasted for about 2 years. As the fund was not performing well, I decided to lower the premium back down to USD 500/month. Although the premium was lowered back to USD 500/month over three years ago, I am still being charged the initial fee of approx. USD 1400/year for a contribution of only USD 6000/year. This amounts to a charge of over 23% (apart from other charges) of the yearly contribution.
    Kindly advise if in your opinion there could be an error from the friends provident’s side and the initial charge should also drop down once the premium is decreased or is it a one way alley that once you increase or decrease your premium, the charges will always be based on the highest premium that was paid into the policy.

  91. Alejo says:

    Do you know if in these brokers you mentioned I can fin auto-called notes or any other structured note to invest?

    • I’m not sure Alejo. But I don’t recommend that you invest in those. Just build a diversified portfolio of stock market ETFs. Odds of success will be higher. Your risk will be lower.


  92. Darla says:

    Also living in Dubai and stuck in a crap FP Premier Investment. Sadly started out with $2000/month payments and after a year got persuaded to increase our payments which increased our initial units which are charged 7.2 % in fees plus the fund fees. And I now notice the latest fund our so called advisor put us in has 4% fund fees (unreal). We started this policy in 2008 so we are in deep. In Nov. our policy was at 0 gain, premiums in were equal to value. Sadly we were busy moving and just as we were ready to pull out the markets dropped drastically. So now we face a loss of $35,000 on our accumulation units. Our initial units have suffered $11,000 loss. If we take out our initial units now based on the years remaining they will charge us 45% in fees. So that means us walking away with $40,000 and them keeping around $32,000. In Nov. the decision would have definitely been take out accumulation units and we were debating about the initial units and whether anything would be able to return the needed 7.2% fees plus fund fees. But now with the market being so low and having the value of our fund drop overall by $36,000 we don’t know what to do. In total we have $240,000 in it. We are good savers, just really bad at making good decisions and put it in the worst place possible.
    Embarrassed to having been taken for such a ride and not having realised all the fees involved. Initial advisor (had about 4) said 1.5% forgot to mention the quarerly part. But we are where we are and have to cut our losses.
    We are 10 years from retiring and need to not mess up again. I have your book (after my son told me to buy it) and have been reading up on the ETFs and we want to open an account at one of the places you mentioned.
    I have an appointment with the “advisor” and am unsure as to what to do. My son says get out even if market is low and take it and put it elsewhere.
    We would hugely appreciate any advice you could give us.

    • Hi Darla,

      Here’s an option, if you don’t want to “take it on the chin.” Take out whatever you can, penalty free. Ask your broker how much you can sell without getting hammered by penalties.
      You could leave the remaining money in the portfolio. But DON”T let your broker pick your funds. If you haven’t made money since 2008 that means your broker built you a portfolio based on how well he could “make a sale.” In other words, he showed you charts of funds that had done well in the past. Then he stuffed your portfolio with those funds. He didn’t care about diversification. He didn’t care about fees. He just cared about commissions.

      So, with the money that you leave with Friend’s Provident, build a responsible portfolio. In this post, I discussed how: http://andrewhallam.com/2015/05/if-you-invested-with-friends-provident-make-the-best-of-a-bad-situation/

      Whatever you do, don’t add more money to this portfolio. Follow the strategies in my expat book to build something low cost, and diversified.


  93. Darla says:

    Hi again,
    Thanks for the quick reply. So even though the mkt has dropped and our poorly chosen portfolio has been hit hard, you would advise to pull it out and take the market loss. We are down a lot. As far as the initial shares if we pull out we are charged 45% of the amount remaining so walk away with 55%. But it carries the heavy fees of 7.2% plus fund fees. Will we ever find enough return to make that pay off? We have 10 years remaining and each year the percentage they keep as a fee for early surrender decreases by about 3%.
    He has us in a totally non diversified portfolio full of equities which have been hit hard.

    We took a payment holiday a couple months ago so are not paying in right now. You can do 12 months without penalty.
    Thanks so much for your advice. It is hard to know where to turn with so many companies like these around every corner and even trying to find an independent financial advisor is difficult.
    Thanks again,

    • Hi Darla,

      Investments drop when markets drop. If you sold an amount (penalty free) and used that money to buy ETFs, you would be going market to market. Let me explain this another way:

      You buy a home for $200,000. It’s now worth $150,000. You want to buy the house across the street but you don’t want to take a loss on your home. However, you would be going “market to market.” The house across the street would also be lower priced, in proportion to the lower price of your home. If you wait for your house to be worth $200,000 again, the house across the street would have risen in value as well.

      As for selling everything and taking a financial penalty, that’s your decision to make.


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