What To Do If Zurich International Holds Your Money Ransom

swat-team

 

Recently, I received an email from a British couple.

They had invested in a Zurich International Vista plan. These are extraordinarily profitable for a salesperson to flog. As such, they have spread like pandemics among global expatriates. British investors tend to be the most likely victims.

The couple that emailed me is locked in to their investment plan until 2026. They have withdrawn all that they can, without paying a penalty. But they have $168,000 SGD remaining in the plan. If they withdraw this remaining sum, Zurich will penalize them. Instead of the couple receiving their full $168,000, the company would keep $75,600 as an early withdrawal penalty.

No, it isn’t fair.

But the person who sold this policy to the couple earned a massive commission from Zurich International. To recoup that commission, Zurich needs to keep this couple’s money with the firm, as long as possible.

This couple is stuck. They don’t want to pay a $75,600 penalty.

So instead of withdrawing the funds, they plan to keep the money with Zurich—without adding another penny, of course. But here’s the problem. Many of the advisors selling such policies are concerned with one thing: massive commissions. Few are trained to build diversified portfolios.

So nightmares compound for their clients. I gave plenty of examples of this, in my book, The Global Expatriate’s Guide To Investing. When commission-hungry sales reps sell such products, they usually do so with charts showing impressive, historical returns. They look at the funds that have done well in the recent past. And they tempt their potential clients: “You see, these funds are returning 15% per year. We can get you into these, and you’ll make great returns.”

Unfortunately, tomorrow’s winning geographic area (and the stocks associated with that region) continue to change. Looking to the past, and expecting that to be a prologue to the future, is foolish. But that’s exactly what many of these advisors do.

Investors who are stuck with expensive policies, such as Zurich International Vista, may need to take matters into their own hands. If their advisors aren’t capable of building  diversified portfolios from the products offered by Zurich, then the investors must.

Instead of speculating, British couples can build a diversified portfolio of British stocks, Global stocks, and British or Global bonds. A good rule of thumb suggests that investors should keep a bond allocation that’s roughly equivalent to their age. That means a 40-year old couple would build a portfolio comprising 30% to 40% of its total in bonds. Bonds don’t earn great returns. But they add plenty of stability when stock markets plunge.

And when stocks fall heavily (and they do, from time to time) bond prices usually rise. Once a year, the investor would need to rebalance their portfolio. Selling off some of the winners, to buy some of the losers. Doing so is psychologically tough. But it’s important.

It ensures that you are always a little bit greedy when others are fearful, and fearful when others are greedy.

 

 

Here’s a diversified Zurich International Vista portfolio for a British couple between 35 and 45 years of age.

 

Allocation

Investment Class

Fund Name

Total Fund Expense Ratio

35%

British Government Bonds

 

Or

 

Global Bonds

ZI Threadneedle Sterling Bond Fund

 

Or

 

ZI Fidelity International Bond Fund

1.0%

+0.75% ZIL

 

 

 

 

0.75%

+0.75%

35%

Global Stocks

BlackRock Global Funds, Global Equity

1.83%

30%

British Stocks

BlackRock Global Funds, United Kingdom Equity

1.73%

 

Notice that I provided two choices for bonds. Unfortunately, both are expensive. Bond funds should be cheap because bond returns are low.

After fees, over time, these two bond funds will likely just tread water. Should you avoid bonds then? If you choose to do so, add lower cost bonds to an alternative account. Don’t forsake bonds entirely, no matter what. Even if they don’t earn decent returns, they will provide portfolio stability. And when markets plunge, rebalancing (by selling some of your bonds) will provide your account with some rocket fuel when stocks recover.

Of course, I don’t recommend that you invest with Zurich International.

The fees are too high. Including platform costs and management fees, total portfolio costs will average about 4% per year. But if you’re stuck in such a platform, and don’t want to pay high redemption fees, you might as well build a responsible portfolio.

 For those wanting something better: The Global Expatriate’s Guide To Investing shows how to build a global portfolio costing 0.2% or less.

 Image courtesy of pixabay.com


andrew hallam

andrew hallam

I’m a financial columnist for Canada’s national paper, The Globe and Mail, as well as for AssetBuilder, a financial service firm based in Texas. I’m also the author of Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School (Wiley 2011) and The Global Expatriate’s Guide To Investing: From Millionaire Teacher to Millionaire Expat (Wiley 2015). My mission is to educate, motivate and inspire people on basic retirement planning and best practices for investing, using evidence-based strategies. I'm happy to comment on your questions. However, please read the Terms of Use.

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115 Responses

  1. Neil says:

    Hi Andrew,
    We have found ourselves in exactly the same situation (except with less cash stuck with Zurich). Just to clarify – are you saying that we can inform Zurich to change our portfolio allocation at any time? Will there be charges associated with this?
    Ridiculously I have to ask you because I no longer trust the person who sold us this fund due to his shameless mis-selling and have no joy when attempting to contact Zurich…
    Thanks,
    Neil

    • Hi Neil,

      Yes, you can change your Zurich funds, no charge, at any time. Take the bull by the horns on this one. From my experience, most of the reps are “performance chasers” instead of responsible portfolio builders. As such, underperformance comes from fees + poor behaviour.

      Cheers,
      Andrew

    • Roy Chowdhury says:

      Hi,

      I am in the process of creating an action group so that individuals who have lost money with Zurich investment can unite and potentially take legal actions against Zurich to recoup some of their lost investment. If you want to be part of this group please search for a group ‘Unite against Zurich’ in Facebook and join. I have created the Facebook group so that we can have a single communication platform to interact with the group of individuals who want justice to be done to these greedy large corporates who have been running their multi-billion dollar companies by taking money from hard working people.

      If you are one of us and trying to get a fair deal we would love to see you in the group.

      Thanks

      Roy Chowdhury

  2. Simon says:

    Hi Andrew,

    With bonds performing so poorly and having greater instability moving forward (from everything that I am reading and hearing) is there an alternative “safe” investment to balance a portfolio? One friend who works in the financeindustry has suggested that property investments, including a mix of commercial property are a good suggestion.

    Do you know of any funds for these with Zurich (yes I also got a little burned by these guys) and (UK based) ETFs (I have read your excellent book)?

    Cheers,

    Simon

    • Hi Simon,

      Financial analysts can’t determine the future yields of bonds. This article may make you much more skeptical about forecasting the direction of any asset class. The best thing for you? Don’t listen or read financial analysts’ reports. More often than not, they are wrong…..especially if the majority are agreeing on the same thing.
      http://assetbuilder.com/andrew_hallam/experts_say_stocks_are_going_to_crash%E2%80%94so_what_are_you_going_to_do_about_it
      Cheers,
      Andrew

    • Roy Chowdhury says:

      Hi,

      I am in the process of creating an action group so that individuals who have lost money with Zurich investment can unite and potentially take legal actions against Zurich to recoup some of their lost investment. If you want to be part of this group please search for a group ‘Unite against Zurich’ in Facebook and join. I have created the Facebook group so that we can have a single communication platform to interact with the group of individuals who want justice to be done to these greedy large corporates who have been running their multi-billion dollar companies by taking money from hard working people.

      If you are one of us and trying to get a fair deal we would love to see you in the group.

      Thanks

      Roy Chowdhury

  3. Manita Khuller says:

    Would you like to comment on Skandia International Executive Bond,

    i am in the exact same situation with Skandia. My money is locked into a QROPS in an 8 year bond. The problems is that the Financial Adviser was nothing more than a commission based salesman for Skandia. He trapped me when I was living overseas as an expat. I was completely deceived by a pack of lies the FA fed me. I thought Skandia would not accept a fraud fund like LM Investments into a regulated product. I was wrong. They not only had accepted it with knowledge of all the fraud behind it, but they have me in a high cost bond with large exit penalties if I try to get out of it. The Bond serves no purpose other than to reduce my Pension Yield.

    If I had known what i know now, I would never have got into this QROPS.

  4. Brendan says:

    Thanks for this Andrew, and well done on the new book (have way through and great stuff so far). My only complaint is that you didn’t write it 5 years ago 🙂

    I got suckered into a Vista fund back in 2009. I listened to that Silver-Tounged player, and signed up to a 25 year plan in 2010. I took full advantage of the bonuses dangled in front of me, and made significant (for me) contributions during the over the “Initial Contribution Period”.

    After the 18 months my financial situation changed (kids are expensive), so I requested a Premium holiday. A few months later, I wanted to take a closer look at the fees so asked for a breakdown from Zurich. Not impressed by the numbers, I looked back at my policy and discovered that the initial payments were subject to a 4% “Expense recoupment charge” over the life of the policy. To make a long story short, I raised a complaint with FIDREC against my advisor for their negligence when they sold the policy. It went to mediation, but they were not willing to budge, and in the end we dropped it.

    Now, the policy has become dormant because I have not paid into it since the premium holiday. The notification went to an old address, so I did not realise the implications. My advisors did not tell me the risks – perhaps a little revenge for the complaint.

    As of right now they have taken a huge penalty from the policy. I’ve asked Zurich direct if they will reinstate the policy, which given the above circumstances I should think they will. Even so, I think once they do reinstate it, I will cut my losses and get out. I’d rather take the hit now and reinvest whatever I get back.

    It’s been an expensive lesson, but I think a worthwhile one. I realise now that I am the only person who should be responsible for my finances.

    • Thanks for sharing your story Brendan. And I’m really glad you stumbled across my book. This might sound corny, but we’re both in this together. We have a responsibility to others, by sharing what we have learned about these offshore pensions. They shouldn’t be legal. But sadly, they are. We can just do our best to move people away from them.

      Thanks again for sharing your story.

      Andrew

      • Brendan says:

        A quick update: I visited Zurich office directly last week to file my final encashment forms. I went direct, as I did not want to have no further dealings with the “Financial Advisors” that conned me in to taking it out in the first place – IFS (International Financial Services).

        I’ve closed the policy, and they returned my investment minus an 80% penalty.

        An expensive lesson to learn, but perhaps a blessing in disguise. I already have the money, and should have it in my new trading account with DBS Vickers next week.

    • Roy Chowdhury says:

      Hi,

      I am in the process of creating an action group so that individuals who have lost money with Zurich investment can unite and potentially take legal actions against Zurich to recoup some of their lost investment. If you want to be part of this group please search for a group ‘Unite against Zurich’ in Facebook and join. I have created the Facebook group so that we can have a single communication platform to interact with the group of individuals who want justice to be done to these greedy large corporates who have been running their multi-billion dollar companies by taking money from hard working people.

      If you are one of us and trying to get a fair deal we would love to see you in the group.

      Thanks

      Roy Chowdhury

      • Devang Bhatia says:

        Hi Roy,

        I have just joined and know of few more stuck will tell them to join as well.
        Matter of fact another friend and I have initiated a FIDREC complain as well against the agent who has sold since Zurich was never selling the policy directly only via distributors.
        Please add me in and we can discuss more on the forum.

      • H Balaji says:

        Hi Roy,
        I could not find the page on faceook. I am in a similar situation and appreciate your efforts.
        Kind regards
        Balaji

      • Cyntha says:

        Hi Roy,

        I’m in the similar situation and just put in a request to join your Facebook group. Thanks.

      • Aijaz Shaikh says:

        Hello,
        I invested in M-Funds through Zurich! The rest you probably know. I want to get out of this trap with min losses, but how?

  5. Gwyn says:

    Help.
    I need to sort my QROPS. Luckily, I think, I have paused a Friends Provident plan, I have signed up for- but it hasn’t gone through yet.
    What are my options.
    I am lost and feeling quite stressed.
    I want to get the money out, as I have a non UK spouse and children, but I do not want to lose my cash in fees….

    • Hi Gwyn,

      I may be able to offer some thoughts, but I’m unclear of what you’re asking.

      Andrew

      • John says:

        I have a similar issue. I need to take out my QROPS, but you need a platfrom and they all cost surely?

      • Matthew says:

        I have a similar issue.
        How can I access my pension in the UK and move it to QROPS without getting nailed for Fees with someone like Zurich?

    • Manita khuller says:

      Please do not sign up for Friends Provident, Skandia or any of these platform providers. From bitter experience I know now that you DO NOT need a bond provider in a QRops or even an investment manager. You will simply tie yourself into useless high cost strait jackets and pay these vultures. I you want more thoughts about what I learnt on my QROps , the hard way sadly. Ask me.

      • Thanks for sharing your story Manita. I’m so sorry to hear that this happened to you. But you are being a voice for others. Thank you!

        • Jen says:

          Andrew,can u believe that just 2weeks ago my bank in Qatar told me about buying an investment-with Zurich! I heard the name and said to please stop talking! I was there selling my unit trusts. I just got out of generali 5yr vision last yr (lost Usd1200-which could have been worse)! Expats in Qatar-be aware and beware–don’t let anyone,no matter how professional,no how big the bank,no how impressive sounding the financial expert talk you into anything!

    • Manita Khuller says:

      I too have lost most of my UK Pension that I foolishly transferred to a QROPS in Guernsey. I was put into a Royal Skandia plan via a Guernsey based QROPS pension.
      In the process I have learnt a lot about what is a QROPS, what is the role of the Pension Trustee, what is a Bond and what is it doing within a QROPS, Illegal and unlicenced financial advisers operation in non UK jurisdictions, preying on British Expats.

      I am co-ordinating a QROPS action group to bring action vs the QROPS pension trustees and possibly the UK HMRC for creating such a Frankenstein.

      I am already in contact with 20 QROPS investors who have but lost all their money in high risk investments like LM MPF, Mansion Student accommodation, etc etc.

      If you are interested in a class action as part of such a QROPS group please contact me,

      Thanks

      MK

  6. Gwyn says:

    I assume I should note proceed with FP? If that is correct. What are my options?

  7. Manita khuller says:

    Dear Andrew, I have been sold into and 8 year bond with Skandia international, whose high costs were not revealed to me at the outset. Unbeknownst to me the financial adviser was unregulated, though he was advising on regulated UK pension schemes with regulated intermediaries. I know I soulnd naive and foolish, I really got caught out here.
    Skandia have indicated a huge penalty if I want to get out, any ideas here how to get out of Skandia with minimal damage.

    • Hi Manita,

      I’m sorry that I don’t know how you can get out, with minimal damage. I hope the contract isn’t for long. In some cases, you can take out some of your money, penalty free. Find out if this is the case for you. Then you could invest that money efficiently.

      Cheers,
      Andrew

  8. Manita khuller says:

    Please support a recently started campaign against Corporate crooks who rob us if our life savings at

    https://www.change.org/p/prime-minister-tony-abbott-give-back-our-life-savings?recruiter=200046026&utm_source=share_petition&utm_medium=email&utm_campaign=share_email_responsive

    Please share the link with others, so together we can bring justice..

    Thank you,

  9. Meagan says:

    Hi Andrew,

    I am some of my colleagues are in the same situation holding a retirement account with Friends Provident. We felt secure in our decision as our many higher ups recommended him and use him as well. I came across you book, read it, loved it, and now have started a book club with some teachers about it. You book has helped us understand and become more aware of our finances and how to create a responsible portfolio. Thank you!

    But, for those of us who do have this account with Friends Provident, do you recommend the same advice for those with Zurich. If we ask our advisor to change our portfolio from what are now mutual funds around the globe, to a balanced index fund/bond, will he do that. The first time I mentioned this to my advisor, he commented that it was a very “American way to go about it”, and dismissed it right away. So, if he does change to say U.S. index/International index/bond…will this cut down on the fees that I am now dreading???

    Some colleagues are planning to just pull out…but having been in this for two years that means losing about $12,000! Is it worth it in the long run to pull out and just start new investments somewhere else? Or is it best to continue, hoping that a portfolio of index funds will change that???

    I feel lost…and embarrassed that as an educator I did not look into this more before I signed up. 🙁

    Thank you though for your book, I know and understand way more than I did a few months ago!

    • Phil says:

      I was in a similar situation with Friends Provident and eventually decided to stop paying in and withdrew everything that i could penalty free. The remaining amount (around 18 months contributions) was moved into an index fund (which still charged 10x what Vanguard does) and left to wither. Even if the market does well over the next 20 years I will be lucky to get back my original contributions, but this felt better than taking the 80% hit now.
      Live and learn, eh?

    • Roy Chowdhury says:

      Hi,

      I am in the process of creating an action group so that individuals who have lost money with Zurich investment can unite and potentially take legal actions against Zurich to recoup some of their lost investment. If you want to be part of this group please search for a group ‘Unite against Zurich’ in Facebook and join. I have created the Facebook group so that we can have a single communication platform to interact with the group of individuals who want justice to be done to these greedy large corporates who have been running their multi-billion dollar companies by taking money from hard working people.

      If you are one of us and trying to get a fair deal we would love to see you in the group.

      Thanks

      Roy Chowdhury

      • Aijaz Shaikh says:

        Hello Roy,
        I don’t use facebook… how else I can join the Action Group?
        Looking forward in hearing you back soon.
        Thanks for your efforts.

  10. Peter Williamson says:

    Hi Andrew

    I am an ex-financial markets trader who is in the process of building an advisory business … I haven’t sold a single Zurich vista but I have ended up taking over advising on quite a few for friends who had been ‘advised’ in the past. I don’t take a fee for this because I want them simply to see what I can do and either invest with me in different ways or tell their friends… besides, as you know there are more than enough charges draining performance on the very limited range of options within these accounts as it is. I want performance.

    I have lived and worked in Singapore for 14 years. Many of the larger Mutual Funds, Hedge Funds and Sovereign Wealth Funds have been my counter-parties for a long time in this region. My expertise became Emerging Markets Asia Fixed Income, FX and Rates Derivatives… So I can count and know a couple of things about the Psychology of investing. I back that up with two degree in the field of endeavor. My greatest challenge is personal selling as I have had a career based on performance and institutional relationships. I’d love to have a quick phone chat to just share some ideas and also just to check what you think from the outside of my approach to the legitimate need for well qualified professional advice in some instances (nothing wrong with doing it yourself).

    I note quite a few of my clients listen to me.. read you stuff online and then we do business… which I am very happy with… I don’t mind competing for business and definitely want to have client relationships that are based on full information and rational decision making,,, Having said that I don’t always follow the generic conventions on portfolio allocations and investment strategy as with my amount of experience I can afford to do that (I started trading professionally in 1985). You wont find me critical of your ideas either among my clients or in the public domain. You will find me critical of the majority of people licensed to give advice in this region ;-). I am nearly three years into this profession now so I understand and have seen most things.

    Hopefully I look forward to an interesting chat.

    Kind Regards Peter W

  11. Nick1411 says:

    Hi Andrew,
    Once again another post from yet another (naive, miss-informed, angry), expat in Asia, (Hong Kong), so the story goes…
    ‘Purchased’ or sold a premier FP 25 year policy in HK in Aug 2008, via De-vere contributing initially 550GBP/month and then ‘advised’ to increase to 1100GBP in the 18 months period.
    Currently ‘investing’ 550GBP/month, policy value is approx. 51,650GBP, (total contributions 53,850), I did take a 3000GBP withdrawal in 2010 just to see if it was possible, (even with this a paltry 1.5% increase!)
    Currently on my 3rd ‘wealth manager’ which I notice now that the intermediary is now Acuma HK Ltd, (whilst under the precision group on managers correspondence, believe this change happened last year).
    Anyway, don’t have too many review meetings nowadays apart from when being advised to switch some funds allocation. Currently hold 7 funds (with majority in 2 GAM funds which coincidentally was ‘advised’ to switch into 1 year ago), other funds shown below, (I notice that this fund carries heavy initial charge and I assume that the manager would benefit from this (and probably only chance they have with ‘somebody else’s original client).

    GAM GROWTH – Initial charge 5.00% Annual charge 0.70%
    GAM STAR BALANCED – Initial charge 5.00% Annual charge 0.85%
    Parvest Equity Brazil Initial charge n/a Annual charge 1.20%
    Baring Eastern Europe Initial charge 5.00% Annual charge 1.50%
    First State China Growth Initial charge 5.00% Annual charge 1.50%
    Pictet CH Precious Metals Initial charge n/a Annual charge 0.30%
    JPMorgan India Initial charge n/a Annual charge 1.20%

    Having just read through these ‘familiar’ cases, I asked FP for a surrender value (see below!), with their additional comments:-
    “Policy value Gross = 51653.36
    Net = 36172.35
    SV Ded’n = 15481.01

    Policy value Gross = Fund Value
    Net = Surrender Value
    SV Ded’n = Surrender Penalty

    The estimated surrender value is based upon current unit prices and is not guaranteed.

    The actual surrender value that would apply in the future may be higher or lower than the amount shown above.
    Premier/Premier Ultra: Please note that the surrender value does not incorporate the plan fee [debt] from inception if your client had contributed 18-months initial allocation period only or where the policy holds no accumulatiion unit value, a plan fee [debt] may incur, once surrendered. The plan fee [debt] will be deducted from the surrender value, as an additional charge”.

    Not sure how the above paragraph further affects the policy, but needless to say, at this moment not at all impressed. As with others, what options to I have, run down the policy to maturity and reduce monthly premiums, take a ‘big hit for me’ by surrendering.
    I can swap and change through the website and some of the funds have performed well (but not so much exposure now), whereas others are poor, but it appears this incidental if there are so many charges and hidden charges with the policy.
    I appreciate that I have also the complexity of currency ex-change rates to consider as well.
    Has anyone had success with these policies at all considering that they are huge in South East Asia, is there any portal/blog where policies can be discussed/reviewed and offered.
    I have just asked how much I can ‘deduct’ from the policy penalty free and the figure is 21,555 GBP and I could look to invest this is various options suggested on your blog and via your book, (which I’m currently reading). Again, would this make sense, as the remaining 30,000 GBP appears to be ‘locked’.

    Cheers,

    Nick1411

  12. Petra says:

    Hi Andrew,

    Sadly, I also bought into the Zurich Vista Plan. I realized something was amiss about a year into it. I stopped payments after the 18 month period and have now read your book – which should be a bible for expats! I’ll be opening an account soon with TD Luxembourg.

    As for my money in Zurich, I don’t know if I can bear to take the hit and endure a heavy surrender penalty by cashing out. So, I’m wondering how best to diversify my portfolio with Zurich which is currently in gold (15%), natural resources (25%), Templeton GI bonds (10%), Blackrock global allocation (30%) and BFG Japan Sml & MD Opp (20%) I’ve read your diversified portfolio advice for the British couple invested in Zurich and read your Canadian Couch Potato chapter with respect to apportioning bonds/stocks etc. based on nationality and age. However, I was hoping for a little advice. I’m Canadian, but I have been investing in Zurich in US dollars. Do I apportion my investment as if I was American – 30% bonds and 70% global stocks (although I do plan to return to Canada)? I’m 38 and although a non resident of Canada, I’m employed by a Canadian company and contributing to a pension. So, I think the bond allocation would be safe at around 25/30%. Do you have any suggestions on how I could diversify my portfolio with Zurich as you have done above with the British couple?

    This blog and your book are such great resources, and I sing the same tune as other expats; if only I had come across this information before the silver tongued Zurich lizard! Better late than never though!

    Cheers,
    Petra

    • Roy Chowdhury says:

      Hi,

      I am in the process of creating an action group so that individuals who have lost money with Zurich investment can unite and potentially take legal actions against Zurich to recoup some of their lost investment. If you want to be part of this group please search for a group ‘Unite against Zurich’ in Facebook and join. I have created the Facebook group so that we can have a single communication platform to interact with the group of individuals who want justice to be done to these greedy large corporates who have been running their multi-billion dollar companies by taking money from hard working people.

      If you are one of us and trying to get a fair deal we would love to see you in the group.

      Thanks

      Roy Chowdhury

  13. lucky mike says:

    Andrew – query on your original article – you recommend as bond fund options in the Zurich platform the ZI Threadneedle Sterling Bond Fund or the ZI Fidelity International Bond Fund. as I understand it, these “ZI” funds are Zurich’s in-house mirror of the underlying Threadneedle or Fidelity fund – but incur an additional 0.75% AMC? why recommend them – is it just because Zurich don’t offer the underlying fund directly within their platform?

    • Based on the data I was provided Mike, I couldn’t see that fund directly. I don’t know what funds you have access to, personally. But you already have the tools to select intelligently. Think diversification. Think low cost. If you can’t buy the bond fund you want, buy a different one with the broadest exposure you can find. And of course, make sure it’s reasonably cheap.

      Cheers,
      Andrew

    • Roy Chowdhury says:

      Hi,

      I am in the process of creating an action group so that individuals who have lost money with Zurich investment can unite and potentially take legal actions against Zurich to recoup some of their lost investment. If you want to be part of this group please search for a group ‘Unite against Zurich’ in Facebook and join. I have created the Facebook group so that we can have a single communication platform to interact with the group of individuals who want justice to be done to these greedy large corporates who have been running their multi-billion dollar companies by taking money from hard working people.

      If you are one of us and trying to get a fair deal we would love to see you in the group.

      Thanks

      Roy Chowdhury

  14. James says:

    Hi Andrew,

    I’m currently reading your book and unfortunately i am in the same position as a number of others in that i signed up for a Generali Vision plan around 5 years ago. I am British and living in Qatar, I have made contributions of circa $79,500 and the plan value is currently $76,500. Partial surrender value is circa $45,000 and total surrender value is circa $47,000. I am planning to partially surrender and leave the balance sat in the plan before following the “couch potato’ investment plan laid out in your book, probably via Saxo Bank in Dubai. Would this option work out long term even if we relocated back to the UK in a few years?

    Many thanks

    James

  15. Art says:

    Hi Andrew,

    Unfortunately, I was on of the people who was duped into signing up for a Friends Provident Plan. This plan required me to make payments for at least 18 months until I was vested, at which time I could change or cancel the plan. To make matters worse my Investment Adviser suggested I do my investment through a Trust Company. I lost my job before the 18 months was up so I was unable to continue payments. Fortunately I had not invested a great deal, only $18-20K, none-the-less I would like to be able to get the money out. What happens in such a case, do FP simply keep my money?

    Additionally, I recently received an invoice from the Trust Company asking me to pay a 300pound of so fee for annual services, or to pay to have the account transferred back to my name. I paid to do the latter, however the Trust company is requesting Certified Documents to complete the transfer of the account. The is not a problem however, before I spend anymore money on the process I would like to know if there any chance of recovering any of my investment, or is it a write off?

    Thanks so much,
    Art

  16. sreepati says:

    Dear friends.
    I have taken Zurich VISA in 2013 and MCP of 1500 USD paid for 18 months, now reduced to 300 USD. As of today I paid 31500 USD, Surrender value is 11500 USD, Partial withdrawal is 4500 USD. is the policy doing good or worse can any one advise. Also is it good decision to reduce to 300 ??

    Also please advise which financial advise is the best.

    • You haven’t mentioned what the market value is, so we don’t know what your performance has been. That said, these policies are always expenses and tend to perform poorly indeed.

  17. Sreepati says:

    The market value is 41500 USD

  18. David says:

    I was approached by a financial advisor in Singapore who have been aggressively pushing Zurich vista for the last 3-4 months, I have met him 4 times and up to now I am still not clear on the total annual charges. I have done my homework and did a projection over 10/25 years and indeed the initial bonus given at the end of the first year is quickly repaid through the 4% recoupment fee. The FA tells me that the RIY is only 0.99% for a 25Years plan up to 1.95% for a 5 years plan,,, here is the calculation for a 25 Y plan: expense recoupment fee: (18/300)4%=0.24%, + the policy management fee of 0.75% + 144sgd per year of policy fee.. which is 0.99%+ 144sgd,, in certain cases the initial charge is waived through this broker, and policy management fees are between 0.75% and 1.5%( he mentioned that through vista the policy management fee were lower and that it was the institutional rate as opposed to the commercial rated I would have to pay if I would buy those funds direct through a trading platform. I don’t think I will sign up for Vista because I do not have a full understanding of the charges yet ( after 4 meetings!) and I do not like to be tied up for 10-25 years. As I was looking for advice, I was directed to another PA from Saint James wealth, which is the biggest wealth management firm in the Uk, I think it is based in Ireland, their charges seems lower, it is more transparent (at first sight) the investment is not tied up for such a long period of time, there seems to be more flexibility, nevertheless I find the annual charges rather high too ( but within the average compare to other wealth management firms such as Barclays, Coutts, Towry…) The annual charges are as follows: Yearly plan management charge:1.5%+Average fund management charge (AMC) 1%-1.5%.(but the FA mentioned that part of that charge was already reflected in the funds performance and that the annual charge was actually the expense ratio-the AMC, so 2.7% -1.5% =1.2%).so total is 2.5-3%,,thats seems a lot too. Their funds have an expense ration of 2.35%-2.7% ( not too sure what that stands for) No more surrender fee after the 6th year, first year it is 6%, 2nd year 5% and so on…every year you have the possibility to take 10% of your investment. what is your take on that? Is Saint James Place any better than Zurich as it seems, or it is just Tomatoe,/Tomato ? Saint James Place does not propose and ILS, and offers more flexibility and does not tempt you with a juicy bonus..

    • Hi David,

      Both options are very expensive. Instead, take an easy and much more profitable route. Open an account with a brokerage like Saxo Capital Markets, DBS Vickers or TD Direct International (just naming three examples). Then buy a global ETF (index fund) and a bond ETF (index fund). This will give you exposure to global stocks and bonds at the lowest possible cost, with the highest possible diversification. In other words, it will be safer than with one of these other firms (diversification will be higher) and it will be much more profitable. If you don’t have any interest in doing this, please let me know why. I’ll try hard to convince you. There’s plenty of free stuff on this site showing what you can buy. But if you want something much more detailed, with step by step instructions, as well as detailed explanations as to why you should do this, here’s the link to my book for expats: http://bit.ly/globalexpat

      Cheers!
      Andrew

  19. Rob Davies says:

    Hmmm … wish I’d read this a couple of years back!

    Signed up for the vista plan a few years back and like many of the comments here, I soon realised that the best bet was to stop payments as I earned a better return saving the money in the bank (bugger all interest but at least it wasn’t loosing money).

    Out of the blue, with no prior warning, I received a letter indicating the account was placed into dormancy and an adjustment (aka penalty) was made and quite a significant one at that. Had I received some kind of warning obviously, I would have made a minimal payment to avoid this loss.

    Is there any recourse? Is there any duty on the part of the Financial Adviser or ZI to provide a warning prior to dormancy?

    • Eals says:

      Hi Rob/Andrew,
      I am in the exact same situation. I was with DeVere who sold me Zurich Vista, then went to another FA company due to DeVere’s incompetence and they were then bought out by DeVere! My circumstances changed, but I was told I could leave it to sit and when it matured I would get all back. Guess what, I just received a letter with no prior notice and they are taking $30,000. What happened in your situation, did you get it back?
      Andrew, I am so buying your books, why didn’t I hear about you years ago.

      E

  20. Brian says:

    Thank you for this! Even though it confirms that I indeed got suckered, I at least now know it wasn’t gross negligence on my part, just naivete.

    I signed up for a Vista account in 2008, made the requisite three payments for the first 18 months. Then was laid off, moved addresses, and in the process had my account go dormant. When I contacted Zurich after I got a new job, I was told that the Tokyo office (where I am) had shuttered and all duties had been moved to Hong Kong. Also, my adviser went AWOL; never even responded to my emails.

    I received what I thought was a way to reinstate my account, and I filled out the multiple forms, only to be told I failed to fill them out properly. No further detail was given, and no chance to try again was offered. Also, they tried to place the onus on me for having moved physical addresses, and not telling them with their required multi-page form. So I sent an angry email which included, “My phone number has not changed, and neither has my email, yet you never tried those.”

    I received a pro forma reply about their terms and conditions, and how I am at fault for not following them perfectly.

    Last week I emailed them about how I could get whatever is left of what I put in, and received a repeat of how my policy is dormant and: “Thus, dormancy Recoupement charge of USD ****** and Dormancy Penalty charge of USD 1,000.00 are applied to the policy.” (I’ve edited out the amount.)

    Do both of those mean money I have lost? (The “recoupement charge” being most of the money I put in, but not all.) And secondly, how can I get back whatever I can get back? Do I have to physically go to Hong Kong and stage a hunger strike in their lobby?

    And yes, thanks to this, I don’t trust any investment scheme. I wish I could, though.

  21. Muhammad Uzair says:

    Hi Andrew,

    Thank you so much for giving your expert advice for free. I have a situation with Zurich International. I have taken their VISTA policy for 20 years which I took out in 2010 and have slowly increased my investments with them.My current policy is now valued at USD 66,700 approx. I have no complaints from Zurich as of yet, apart from the fact that, I told them not to invest in banks due to my religious beliefs.

    My funds did perform well over time, but it recently declined in their value due to obvious global financial outlook.

    My financial advisor has been very kind and she is sorry for the mistake which was made and she is actively looking for someone to buy this policy from my side.

    The only fund which is not performing is ZI Pine Jap Sm Cp Eq which is down 24%. The rest all of them are up.

    My questions:

    1) Is it possible for me to ask Zurich to cancel my policy due to misrepresentation? Even though the only thing which I have as evidence is my financial advisor words?
    2) Is it possible for me to sell my policy to the third party?
    3) If the above two are not possible, can you please recommend me an alternative fund so that I can increase the value of my fund.

    Thanks
    Muhammad

  22. anseret says:

    I signed up for the Vista ZIL fund ten years ago. Pressured into it by a “friend” in the expat community in Budapest who was on the lookout for mugs (like me). I put my policy on hold for three years and it has now been suspended. It stands at 42,000 CHF now (7,000 chf less than what I paid in). If I take it out now, Zurich will take half. I looked at the terms and conditions and although it is clear that penalties will apply, they don’t stipulate that you will be robbed of half of your money. I was told that even if I leave the money where it is, dormant (well, not really as they still have it to play with) they will still take half. My original advisor has vanished and I wouldn’t want to talk to him anyway. Isn’t there a case to be brought against Zurich for unreasonable charges? Is anyone interested in a class action?

    • Terri,

      Unfortunately, you signed a document which explained all this. But you were not able to record the false promises that your advisor made. That’s why a lawsuit couldn’t be won. Your signature agreed to all of this. It’s disheartening, I know, to realize that firms and people like this do exist. But unless you have proof that they lied to you, there’s no leg to stand on.

      Andrew

    • Roy says:

      Hi,
      Please see my note to Andrew below. Please drop me a line if you are interested to be named in the law suit. No obligation to you.
      Thanks
      Roy
      —-
      Hi Andrew,
      I came across your blog while researching Zurich’s Vista Investment product. I am currently gathering evidence and putting together a list of investors who have been conned by Zurich and its network of fraudster (known as advisors) who have lured naive investors into buying this product. I am currently consulting lawyers in UK to bring a class action type law suite against Zurich International for misspelling this product and your help to connect me with investors who would like to be named in the lawsuits will be much appreciated. Can you please post this into your blog so that interested individuals can reply to it. Many thanks.

  23. Paul says:

    Hi Andrew,
    Like many others, I am significantly invested in a Vista plan that will mature in 2030.
    I am planning to take the FA to mediation via FIDREC, but need to make this decision soon. Not sure if there have been any success stories from anyone where they were able to get recompense from the FA company that originally sold them a Vista or similar product?

    It comes down to our word against theirs unfortunately, as it seems they are quite experienced dealing with these types of complaints. Our only leverage is that we decreased our monthly installments significantly right after the 18 month lock-in period which demonstrated our desire to not maintain such a high level of investment post-bonus period. That said, I’m not too hopeful…

    Cheers,
    Paul

  24. Leo says:

    Hi Andrew,

    I’m reading your book The Global Expatriate’s Guide to Investing.

    I’m stuck with the Zurich Vista plan paying $2.000 dollars a month. I want to reduce to the minimum of $300 but they are saying that If I do this I will still pay the same fees related to the 2k monthly invested.

    Have you ever considered creating a blog post or a diagram chart specifically on people with a similar situation, like a guide on how to get out with the less damage possible?

  25. Roy says:

    Hi Andrew,
    I came across your blog while researching Zurich’s Vista Investment product. I am currently gathering evidence and putting together a list of investors who have been conned by Zurich and its network of fraudster (known as advisors) who have lured naive investors into buying this product. I am currently consulting lawyers in UK to bring a class action type law suite against Zurich International for misspelling this product and your help to connect me with investors who would like to be named in the lawsuits will be much appreciated. Can you please post this into your blog so that interested individuals can reply to it. Many thanks.

  26. terri says:

    The jurisdiction is the Isle of Man though, so I would have thought Manx lawyers would be more appropriate, but I’m not sure. Certainly the UK Ombudsman Office referred me to the Ombudsman of the Isle of Man. I’m very interested in a class action. Not only is my investment worth less than the money I put in, if I want to cancel the whole thing and get my money out, they are claiming an outrageous 50%+ for “fees”. It’s a downright scam. While one expects to pay an cancellation penalty this is massively disproportionate.

  27. Roy Chowdhury says:

    Hi Terry/Leo and others,

    The key to fighting this is forming a collective and gather enough support so that a credible argument can be put forward rather than individual cases. These kind of investments are created to scam money out of individuals and these companies know very well that 1 or 2 person will simply not have the means to fight this by themselves. They capitalize on that weakness. But if we can gather enough people who are willing to present their case as collective then the situation changes quite dramatically and it will force Zurich to pay attention. They know very well that what they are doing is immoral , but they have set the investments up in a way that has every legal backing which is hard to dispute. But that being said, post GFC cases are argued not only on the basis of legal merits. The ethical aspects are also given due consideration by the court especially when they see a group of hard working individuals fighting for their hard earned dollars against global financial house solely motivated by maximizing profit. If we can organize ourselves (which is not that hard in today’s connected world) to fight this together, I believe we have a fighting chance.
    The US based law firm I have spoken to specialize in this kind of lawsuits on a no fee basis (but they will take a percentage of the total pay out) which will still be much less than what we will lose by staying invested in this scam.

    For your information here are the next few steps I am planning to take,

    1. Open a Facebook Group to invite investors who would like to be named in the law suit to recover their money.
    2. Build a list of claimants (Name, Policy Number, Amount of Claim)
    3. Issue a legal letter to Zurich.
    4. Lodge a compliant against IFS to the relevant Financial Regulator in Singapore for mal practice in selling the investments on behalf of Zurich.
    5. Lodge a compliant against Zurich to the relevant Financial Regulator in Isle of Man for mal practice in selling the investments.

    Off course, its a long shot and nothing is guaranteed at this point. But we have a moral obligation to act on this otherwise these companies will keep doing this with others like us and keep taking advantage of the legal loopholes. I am determined to fight this not just because my money is at stake but also because I think that is the right thing to do. I would welcome your support in this fight if you are willing.

    I am currently based in New Zealand and my contact details are as follows:

    email: [email protected]
    mobile: +64 21 843 912.

    Thanks

    Roy Chowdhury

  28. Terri says:

    I’ve just been in touch with Zurich again as I want my money out of there. They reiterated that they would be keeping 50% as a penalty (disgusting). Since the last time I talked to them, the value of my policy has shrunk by another 2000 CHF. The operator I spoke to implied that that was my fault because I had selected the wrong investment package (their package). The Financial Ombudsman of the Isle of Man is the correct body to approach but with tax havens, I’m not sure how successful we would be. But keep us all posted Roy.

  29. Roy Chowdhury says:

    Hi Terri,
    Sorry to hear about your experience. We all have similar experience, so you are not alone. Good news is we are starting to organize as a group with a view to take make Zurich accountable for their action and hopefully recover maximum possible amount from our investments.
    A facebook group called ‘Action against Zurich Vista” has been created. Please join that group so that we can start forming a critical mass to make the case against Zurich more credible. Please note, this is a voluntary group as such everyone’s contribution is required rather than putting ownership on one person. Thanks and look forward to seeing you in the group. Roy

  30. Roy Chowdhury says:

    Dear Friends,
    Please join the Facebook group “Action against Zurich Vista” if you have been defrauded by Zurich and its associates (such as IFS Singapore) with their investment product called Vista. This group will provide a platform for all victims to unite and create the critical mass required to present a credible case against Zurich and its associates.
    Once the membership of this group has reached 50+ we will initiate the wave of legal proceedings against Zurich and its associates in their respective legal jurisdiction.
    A reputed US law firm has been engaged who will help this group through the various legal steps and will finally represent this collective group of claimants in a class action if the dispute cannot be resolved through mediation.
    Please take the poll to let us know more about your situation.
    Thanks

  31. Joe Furfaro says:

    Hi,
    I am so glad I stumbled across this web page!
    I too have been defrauded by Zurich and will potentially be losing half of my savings while I was living/working in Singapore.
    I was conned by IFS (now Globaleye) by a commission-hungry sales-rep who had absolutely no interest in my long term financial future. Signed my up to a 25yr plan without my understanding.

    Hi Roy,
    I would love to join this action group to recoup my lost savings.

    Thanks,
    Joe.

  32. Sathi Shan says:

    Hi Roy and others
    Thank you for posting this infor and sharing the plight.
    I too have suffered a lot with Zurich cheating me (sold through Guardian Wealth Management) and would support you or even on a class action. The expense recoup was explained to me as 4% for ICP but now it is realised as over the term. Effectively the 4% over the term 25 years (in my case) makes the whole investment paid during ICP nill (4%x5=100%). Please contact me and I took the investment while in Qatar and now have moved to Australia.

  33. Katie says:

    Hi Sathi, I am also in with a Zurich Vista Policy, and I am a little concerned and now leaning towards Andrew’s approach of DIY / Passive Investing, but that aside I am not sure I fully understand the issue with Zurich and that this is a guaranteed loss in the way you explained.

    The 4% ICP recoupment charge applied annually (on your contributions and bonus Zurich’s added contributions) will certainly equate to nil after 25 years if the investment makes 0% returns, this make sense and is a big concern!

    But surely the idea here is the investment actually makes say 5-6% min. a year returns over the long haul and on this premise it therefore nullifies the recoupment and management fees applied and thus allows you to retain the bonus contributions that Zurich made on maturity?

    In a more optimistic scenario, if the investment makes say 6-7% or more you would actually retain the bonus allocation that Zurich contributed and make some additional returns. Seeing your full ICP is all dependent on the investment making a good return of course and not losing money year on year – but it’s not dead in the water is it?

  34. Sathi Shan says:

    Hi Katie
    Sorry for the late response. You are right in terms of future performance. However, you get only the excess of 4% as a profit.

  35. savara giri says:

    Iam also a Zurich vicitim for the last 5+ years. Recoupment charges eating away all the profits. No matter how many years and efforts on switching there will be no profit.
    Roy i would like to appreciate your efforts and would like to join your facebook.
    Let us see what can be done to get back our hard earned money through advocates.
    I also request all who messaged to join the facebook. Strength in numbers will be a big proof to such a fraud company.
    my email: [email protected]
    My suggestion is to tell the truth about zurich via blogs,posts,twitter,whatsapp,etc.
    Spreading awareness and joining together is the first step.Further proceedings are the next step.

  36. Helen says:

    Hi Andrew
    Here’s John Oliver explaining what happens to your money in these plans.

    Watch “Last Week Tonight with John Oliver: Retirement Plans (HBO)” on YouTube

    https://youtu.be/gvZSpET11ZY

  37. ravi says:

    Hi Andrew,

    My name is Ravi and i’m an Indian living in Dubai. With the current context of ‘BREXIT’ does the above recommendation of Zurich funds (for those who already trapped) still valid? or we should think of some other funds than UK for last 35% of allocation.

    • toony says:

      ‘BREXIT’ is just financial noise – NEVER pay attention to ANY noise when it comes to your investment portfolio if you have a globally diversify, low cost, index fund portfolio like Andrew suggests!

      When it comes to Zurich (or FPI or Old Mutual or any of these insurance wrappers), the advice is ALWAYS the same. GET OUT ASAP when you realise you have been scammed!!!

      Why stay in the trap and continue to get scammed (fees charged are currently >> returns!) Get the remaining funds out and start anew with a DIY account as instructed by Andrew.

      Good luck!

      • Patrick says:

        Tonny, what gives you the idea that Andrew is instructing people to get out of Zurich and start a “DIY account”? In the example he gives in the above blog post, he suggests staying with Zurich but taking the diversification of the portfolio into ones own hands in order to make the most of a bad situation. Did I miss something?

        • Hi Patrick,

          I have yet to see the math work out in favor of sticking with Zurich International or Friends Provident. I wrote this post (and a couple of other posts) to show how to make the best of a bad situation, if you simply don’t want to take the painful, upfront financial hit for selling. If I woke up, tomorrow, as the owner of one of these policies, I would sell, take the financial hit, and invest in a low cost portfolio of my own. My rationale would be entirely based on the long-term math.

          Cheers,
          Andrew

          • Patrick says:

            Thanks for your reply. I’m currently reading your book while planning my exit strategy from Zurich Vista. One thing that’s not clear to me is why your suggestions are different for US, Canadian, British, and European investors. I’m originally British but will probably spend the rest of my life here in the Netherlands. Should I be looking at recommendations for British or European investors?

  38. Roy says:

    Hi All,
    We have now close to 50 people in the action group and we have good momentum building to take up our case to Zurich. We are in early stage discussion with a law firm in UK as seeking their advise on how best to progress in this.
    In the meantime I have seen a few comments from people in this blog that they cannot find the Facebook page for the action group. Here is the link: https://www.facebook.com/groups/997246113667517/
    Also you can do a search ‘Action against Zurich Vista’ Group. Please email me if still no luck [email protected].
    Many Thanks
    Roy

  39. sharon says:

    Hi All,
    is the action group only for people in the UK. I had bought a Vista plan back in 2009 in Singapore.I stopped paying in 2013 because the funds didn’t seem to be performing well. In 2015 they send me a letter encouraging me to make good use of my investment by restarting my payments. As they did not warn of a penalty charge I ignored the letter. about 2 months later they sent me a letter simply to inbform me that since i did not restart payment they deducted money from my funds as penalty. It was almost a third of my entire portfolio. I had been fighting with them for 6 months and they have refused to offer me any way out of my deduction. Does anyone have the same issue?

    • toony says:

      Sharon, normally they close your account automatically (and cash you out) if no payments for 24 months or greater.

      What they are doing suggest you have a sizeable account so they are:
      1. Trying to bleed your accumulation units dry through fees, and
      2. They think they can sucker you into making more payments into the account (DO NOT DO THIS!)

      They are scaring you about additional fees/penalties etc. All initial units in your account, cannot be saved. The fine print (which you signed unknowingly) gives them legal rights to ALL the initial units upfront (this is what they call the ‘exit’ penalty when it’s really the ‘entry’ fee, regardless of whether you leave or stay. They hold the ‘exit’ penalties over your head to ‘encourage’ you into staying and continue to put more money in so they can keep bleeding your account through fees and feed on the money like a vampire!

      Cancel the plan ASAP, and get the remaining funds into an index funds portfolio. The longer they can keep you fighting with them, the more time passes, the more money they can steal from your account (and closer it gets to $0).

      Get Andrew’s book for step by step instructions or risk getting scammed again in the future! Remember, they want you to get emotional about your money – think with your head and GET OUT!

      Good luck!

  40. Mrs B says:

    Hi All,

    Myself and my husband were ‘pushed’ into a Vista plan approximately one year ago and had bonuses and ‘no risk’ flaunted in front of us to invest asap!!! I’m not the most financially astute and just wanted a pleasant nest egg for retirement as I am an expat. We want to withdraw asap before our initial 18 months is up – does anyone know if this is possible? Our working circumstances have changed dramatically and the monthly payments our FA advised are now unsustainable, its plunging us deeper into debt. Can anyone help with some advice? Thank you

  41. Savara says:

    Surrender value = Bonus amount * 8.25% (approximately) * Total policy years
    (* means multiplication)

    I made the above formula from my account details with zurich. The figures match for me. You may check.

    Definition in words:
    Zurich pays a bonus and gets paid @ 8.25% interest on the bonus until the policy maturity period.
    The interest every year is taken via various charges from fund units.
    No matter whatever the market scenario , Zurich gets 8.25% interest on their bonus.
    Zurich bonus is the initial investment zurich makes and gets paid by customers.

    Subtle Financial plan-carefully calculated and setup.

  42. Savara says:

    Please log a complaint at Isle against zurich.
    http://www.gov.im/oft

    If you policy is from UAE
    Search in google : UAE insurance authority,complaints

    If your policy is from Singapore
    Search in google: FIDREC, complaints

    When complaint increases government authorities will wake up.

  43. UK IFA says:

    Andrew,
    As a UK financial adviser who has worked in the UAE, I feel to target Zurich is simply incorrect. Everyone on this website need to start naming and shaming the Financial Adviser/Broker concerned; they are the ones responsible for not fully disclosing the implications of the Initial period and all the charges as these are the people who have misplaced the faith and scammed the clients above with their economy of truth and not Zurich. Zurich might charge a lot but in my experience are better than some of the other Investment plan providers.

    • toony says:

      Zurich/FPI are the root of the WHOLE problem and needs to be pointed out constantly to warn new expats!

      – They designed the product (ILAS) to purposely hide/deceive/steal from customers using confusing language, unfair conditions and much smoke/mirror, instead of standard charges.
      – Zurich/FPI bribe insurance salesman like yourself with a massive upfront commission, to push their poisonous product ahead of rivals insurance companies and proper investment products!
      – They work very closely with insurance brokers to exploit local financial loopholes, provide each other plausible deniability when exposed, while hiding offshore to avoid any accountability!
      – They work closely with insurance companies to exploit insurance agents like yourself! Ask yourself why you were told to push Zurich/FPI so much compared to other rival products like Old Mutual! *hint* Override bonus leading to -> less commission you, more for company!
      – Naming/shaming insurance brokers, who are often “flight by night types” achieves little (think of the current Wells Fargo scam – target the source and not the tellers pressured/forced into participating!)

      Lastly, I can think of 100s of investments/products that are better than Zurich/FPI but I can’t even think of one that is worst…

  44. UK IFA says:

    Sorry Toony, but you miss a fundamental point.

    Do Zurich/FPI sell the product?

    No, they don’t.
    They use an intermediary.

    It is the responsibility of the intermediary (Financial Adviser, broker call him/her what you will) to advise what conditions and charges are applicable for each plan..
    I absolutely agree that the upfront commission compromises the intermediary into not always acting with the highest fiduciary responsibility but that is not Zurich’s fault. I look forward to all countries banning upfront commission as it corrupts the advice and is not in the clients’ best interests.
    Again, you say there is no point naming a “flight by night” broker drawing a comparison to Wells Fargo, but just to reiterate it’s the flight by night broker that approaches the potential new retail client and sells the product (and in the case of Wells Fargo, it was existing clients walking in and being coerced by the teller, so a different angle)
    As you say, these plans are expensive and likely to negatively impact on performance and I totally agree there are many better plans out there. I like what you are trying to achieve because if education was better then less people would be aware of the downfalls of these plans and this website and others like it help with that process. But until the financial adviser do their jobs properly and financially advise the facts, then the retail client is in the dark, and I say again, I feel going after Zurich is missing the point.

    • toony says:

      I stand by the idea of calling the insurance company out more important, ie go after the traffickers instead of street dealers 😉 Banning the ILAS in developed countries should have forced them to develop a better product. Instead, they chose to exploit countries with weaker rules. Banning ILAS -> no misselling of these products possible.

      It’s a fantastic legal move to use an intermediary – allows both parties to work together to exploit the expat while providing each other plausible deniability.
      “We only sell the product – see your IFA if want a refund”
      “We only provide advice – see Insurance if have problem with product”
      “We only host the funds. Bad advice – see your IFA”
      “If want a refund, we don’t have your money – see insurance company”

      You mistook my Wells Fargo reference – the insurance salespeople are exploited by their companies with poor conditions (especially for the UAE). Struggling to put food on table -> good people doing bad things.

      If I had my way, I would:
      1. Make it illegal for insurance brokers to call themselves IFA
      2. All financial advisers must be licenced (UK FCA or equivalent), and
      3. All advice must be fiduciary
      This doesn’t solve everything but goes a long way 🙂

      As in most cases, education is best but unfortunately takes a long time

  45. Dubai_expat says:

    Hi great article. Many people here in UAE are being duped into the Zurich Vista plan.

    I am around 18 months into the plan but at 11 months, my FA told me to increase premium payments for more bonuses. Has this reset the 18 month clock? I made the change only 6 months ago so am locked in another 12 months if so.

    The fund value is 45k USD and contributed 35K USD. That’s quite a lot to write off by walking away now. But as I understand it, I can never get the initial contributions back ever. It’s a 20 year plan.

    • Dubai expat,

      I’m really sorry to hear that you got roped into this thing. Yes, if you plan to build a low-cost diversified portfolio of ETFs (index funds) the best thing you could do is sell your current policy, take the financial hit, and get properly on track.

      I explain how you could build a responsible portfolio here: http://bit.ly/globalexpat

      Cheers,
      Andrew

  46. A R says:

    Hi Andrew, I read your book several months ago, which was most likely the best financial decision I have ever made. I as many others commenting here have been suckered into a 10 year policy paying 3.75% fees. I have just opened an account with Saxo and am currently putting together the list of EFT’s. Finally, I have just requested that my current insurance account is closed, and am taking the hit (roughly $26K of a ($70K invested). Really, I just wanted to thank you for your efforts in educating people like me on this subject, and I wish I had found your book and website three years ago – so that $26K would still be in my pocket!

  47. Sara says:

    I also bought Zurich Vista about 4 years ago.

    However, I moved to the U.S a year ago and they said my account is suspended as I moved to U.S. (which by the way, the financial advisor never mentioned this to me when I bought it). I got an email as below. Apparently, while I am in U.S, I am no longer able to continue the plan but also I cannot get the death benefit.

    Andrew, is it better I cancel the account now and lose my investment? or as it is suspended anyway, I just keep it until I leave US?

    Below is the email received from Zurich

    ………………………
    What does this mean?
    Specifically this means ZIL can no longer:
    · Accept any regular or single premium payments from you. In the meantime, if you pay your regular premiums by credit card or direct debit, these instructions have been cancelled. Any premiums received cannot be accepted and will be returned to you.
    · Accept instructions to switch or redirect any of the funds within your policy.
    · Offer you options at maturity or death, other than to receive payment for the value of the policy.
    · Allow changes to any benefits on your policy, other than to reduce your current benefits.
    · Agree to transfer ownership of your policy to another person resident in the US who would be also subject to these restrictions. Transfer of ownership of your policy to a person resident outside the US may be subject to other restrictions that apply to their country of residence.

    How will this affect your policy?
    Your policy will remain in its current position with the existing fund holding or strategy until it matures – or the policy benefits are realised. We will pay all policy benefits as they become due. You should be aware however, that over time the deduction of charges may have an impact on the value of your policy and any additional death benefit.

    Currently your premium status is Suspended, which means you have not been contributing to the investment for a period of time. Due to the relevant restrictions applicable to USA residents you will be unable to restart your contributions while you are a US resident.

    We recommend that you seek independent financial advice regarding your change in personal circumstances.

    The options now available to you are:
    1. You can cash in your policy and any applicable surrender penalty will be applied.
    2. You can leave your policy invested in the existing fund(s) until its maturity date or it ends on death.
    Please note that the normal charges as outlined in your policy terms and conditions will continue to be taken.

  48. JP says:

    Dear Andrew, I too have got conned into Zurich Vista and my wife and I took out a 25yr policy…oh what a dummy! What I have now done is taken out my the maximum allowed withdrawal (even then Zurich dragged out the process). I have approx $125k sitting there with Zurich so I then moved the money out of the ZL Mirror funds so now only have 4 of the Zurich run funds (so I have cut down the mirror (con) charge). I have also suspended the account and my plan was that every 3 years pay a month and then surrender again, so in effect only pay 5 further sets of premium (my understanding is that you can’t just suspend indefinitely). However, I can’t help think that the ongoing charges will still dramatically eat into all this vs a lack of growth within the funds! My surrender value is around $45k, so I am trying to avoid the $70k+ hit. My advisor sort of suggested this too but back of my head I am not sure if this is to his advantage rather than mine if I stay locked in! The other option is of course to take the hit and go and invest it in a indexed fund or ETF, which i am still thinking of doing.

    Am I right to be suspicious of my Advisor’s suggestion? Has anyone else looked to suspend & do it this way?

    Thanks for anyone’s feedback

  49. Roy Chowdhury says:

    Hi Andrew,
    The movement we started against Zurich Vista and other similar schemes is very much gathering momentum. We now have over 80 members across multiple countries and have raised this matter to multiple country regulators. We also continue to have arbitrations against the Financial Advisors who sold these products on the grounds of misselling, non disclosure of fees & charges and misleading with inflated projection of returns.
    We are also in touch with media and working closely to launch a campaign shortly before we bring in the class action.
    It will be really good if we can connect with you via email/call and discuss this outside of this blog so that we can get some guidance from you.
    If you are agreeable and willing to lend your help to this group, please email me on [email protected] and we shall get in touch.
    Some of the members attended your talk in the middle east and was benefited from the advise you offered.
    Many thanks and look forward to hearing from you
    Roy Chowdhury

    • Hi Roy,

      This is going to be a tough battle to fight. Every person who signed into one of those schemes signed legal documents that explained clearly how the policies work. As such, I don’t have high hopes of you winning anything against Zurich. I will continue to do my best to educate investors–to try to keep them out of such products. I hope you understand. I’m working extremely hard to do that. I’m currently speaking about these products every working day in the Middle East region. Yesterday, I flew to Cairo to continue my free talks. I have to put my energy where I think I can have the biggest, overall impact. My best chance of doing that is by educating others. I hope you understand.

      Cheers,
      Andrew

  50. Shah says:

    People who’ve been ‘duped’ with any Zurich product, please join the Facebook group Action against Zurich Vista. There’s power in numbers and we need you.

    https://www.facebook.com/groups/997246113667517/