If You Invested With Friends Provident, Make The Best Of A Bad Situation



If you invested with Friends Provident, one thing is almost certain.

You didn’t go looking for your broker. He or she found you. Such platforms pay massive commissions to brokers.

As such, brokers are hunters. You are prey.

Whether you realize it or not, you are paying roughly 4% in annual investment fees. No, your advisor didn’t tell you this. But add your establishment fees, annual account fees and mutual fund (unit trust) costs together. Combined, they will equal about 4%.

The mutual fund costs are actually hidden. I’ll bet you a burger your broker didn’t show them to you.

Here’s an example. Friends Provident offers the Templeton BRIC Fund. It invests in emerging market economies. Check out the screenshot below. Annually, this fund costs investors 2.46% per year. That’s the annual management fee that Templeton charges. It doesn’t include Friends Provident’s establishment charges or their annual fees.

Add those to your fund costs, and you’ll see what you’re really paying: about 4% or more each year.


Templeton BRIC Fund Cost Snapshot



A 4% annual cost might not sound like much. But it’s massive. If the stock and bond markets earn 8% per year, you will be giving away 50% of your annual profits to Friends Provident and the unit trust (mutual fund) providers with which your money is invested. If the stock and bond markets average 4% per year, you give away 100% of your annual profits.

Either way you slice it, this is pretty nasty math.

What’s worse, many of the brokers selling these products were so desperate for the sale (remember that commission) they likely sold you on a non-diversified portfolio. In other words, they showed you charts of the funds that had done well in the recent past, saying, “Look at these great past returns. This is what I can do for you.”

Unfortunately, this is the worst way to invest. Yesterday’s winning funds or hot geographic sectors often become tomorrow’s losers. Smart financial advisors don’t chase past returns. They build responsible, diversified portfolios.

As I write this (May 2015) you should be sitting on some pretty amazing stock market profits. Global stock markets have soared. If your money with Friends Provident has not, you have two things to blame: high fees, and a knucklehead behind the portfolio who insisted on buying you yesterday’s winners.


Let me show you examples of what you should have enjoyed during the past few years.


3-Year Returns Of Global Stocks And U.S. Stocks (To May, 2015)

Global stocks: +39.62%

U.S. stocks:       +57.14%




5-Year Returns Of Global Stocks And U.S. Stocks (To May, 2015)

Global stocks: +56.62%

U.S. stocks:       +92.33%



If you measured the above returns in Euros, UK pounds, Australian or Canadian dollars, the returns would be even higher. That’s because the U.S. dollar strengthened over each of those currencies during the past five years.

You may want to ditch your Friends Provident investments. There is, however, a catch. When your advisor sold you this product, he or she made a massive commission. To recoup that commission, Friends Provident needs to keep your money with the firm as long as possible. The longer your money is invested with them, the more fees they can take.

If you try to remove your money before the policy date is up (these can be up to 25 years long) you will have to pay a massive redemption penalty. In some cases, it’s up to 80% of what you invested.


But don’t cry over spilled milk. Let’s look at solutions.

In many cases, you can withdraw some of your money without a penalty.

  1. Find out how much you can take out now.
  2. Invest that money in low cost index funds. I explain how in my book, The Global Expatriate’s Guide To Investing.
  3. With the money that remains with Friends Provident, build the lowest cost, most responsible (diversified) portfolio possible.

Safety comes from putting your eggs in multiple baskets. You’ll require exposure to global stock markets (not just the sectors someone predicts will be hot) and exposure to bond markets.

Equally important, ensure that the funds you select charge low fees.   The less you pay in fees, the more money you will make over time.

Friends Provident provides the following link to their fund options. I’ve provided portfolio samples below, with links to specific funds. In each case, I scrolled through the Friends Provident offerings to show you the lowest cost funds available.


British Investors

Sample Portfolio

% Of Total Portfolio

Fund Symbol

Fund Name

Total Expenses Per Fund

What Is It Invested In?



FPIL UK Index Tracker


UK Stocks



Vanguard S&P 500 Index


U.S. Stocks



Templeton Global


Global Stocks





British Government Bonds

Investors wishing to take greater risks could opt for a lower allocation towards British bonds. Stocks usually beat bonds over periods lasting 10 years or longer. But stocks are more volatile. Bonds add stability.


 European Investors

Sample Portfolio

% Of Total Portfolio

Fund Symbol

Fund Name

Total Expenses Per Fund

What Is It Invested In?



Franklin Mutual European Fund


European Stocks



Vanguard S&P 500 Index


U.S. Stocks



Templeton Global


Global Stocks



Fidelity Euro Bond


European government and corporate bonds

Investors wishing to take greater risks could opt for a lower allocation towards European bonds. Stocks usually beat bonds over periods lasting 10 years or longer. But stocks are more volatile. Bonds add stability.


Australian Investors

Sample Portfolio

% Of Total Portfolio

Fund Symbol

Fund Name

Total Expenses Per Fund

What Is It Invested In?



Baring Australia


Australian Stocks



Vanguard S&P 500 Index


U.S. Stocks



Templeton Global


Global Stocks



Melon Global Bond


Global Bonds

Investors wishing to take greater risks could opt for a lower allocation towards global bonds. Stocks usually beat bonds over periods lasting 10 years or longer. But stocks are more volatile. Bonds add stability.


Canadian Investors

Sample Portfolio

None of Friend’s Provident fund options allow for exposure to the Canadian stock or bond market. As such, a global portfolio, with extremely limited Canadian exposure, is the only option available.

% Of Total Portfolio

Fund Symbol

Fund Name

Total Expenses Per Fund

What Is It Invested In?



Vanguard S&P 500 Index


U.S. Stocks



Templeton Global


Global Stocks



Melon Global Bond


Global Bonds


Other Nationalities

 Consider the models above. If Friends Provident offers a fund representing your home country stock exposure, then allocate a percentage of your portfolio to that fund, as per the examples above with Australian and British investors. If there is more than one, find the cheapest, based on the fund’s posted expense ratio. Forget about looking at past results. Studies show the best predictor of future results is a fund’s expense ratio. The lower the better.




Andrew Hallam is the author of The Global Expatriate’s Guide To Investing.

You can order the book from Amazon, here.






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 and Millionaire Expat: How To Build Wealth Living Overseas. 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.

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245 Responses

  1. diy investor says:

    Nice piece. What gets me is that the surrender value on these policies seems to come out of thin air. Even with the egregious fund management fees and the huge broker sales commissions and the advisor’s annual cut the surrender values make no sense, Even if markets were down sharply over the past several years the surrender values make no sense. Surrender values that take away up to 80% of course should be illegal or come with bold warnings but the financial services industry has a terrific knack for finding the crevices where they can exploit the uninformed.
    The solution to all of this it seems to me is to make it truly possible to efficiently invest for retirement on a global basis. Globally anyone should be able to invest for retirement up to $10,000 equivalent in their currency in low cost well diversified index funds with no tax complications, no currency conversion costs etc. For example, if you are paid in Yuan you should be able to invest in Euro denominated Funds without the tax/currency conversion problem etc. This would benefit capital formation in all countries. From the perspective of the U’S. this would include dropping the inheritance hit on foreigners buying stock on U.S. exchanges.

  2. Phil says:

    This does not even take into account the fact that the underlying fund charges the FPI mirror fund an initial charge as high as 6+% to buy into the fund, most of these fees go back into the pockets of the FPI. In the case of most Aberdeen mirror funds the initial charge is 6.38%. It’s not disclosed in any of the documentation as it is viewed as a cost to run the fund. This is where the life companies make a chunk of their earnings.


    • Those fees are certainly a racket for the industry—belonging on the wall of shame. Thanks Phil.

      • Charlie says:

        Hi Andrew,

        I have a policy with FPI called P15. I have had it for 10 years so I am am half way through it. What would you suggest, lower the monthly investments into it or scrap it completely?



        • Hi Charlie,

          I’m curious about your plan. I haven’t seen one that’s 10 years old (or older) than has beaten inflation. Has yours?
          As for whether you should keep it, when doing the long term math, it’s usually better to get out, take the financial hit and invest more efficiently elsewhere. But you should do that math yourself.


          • Charlie says:

            Thanks Andrew. The policy has made 24% over the past 10 years (2.4% per year). I’m sure that FP would have made much more than that.



        • toony says:

          You mentioned 24% over 10 years. Could you find out the surrender value (ie. real value) and calculate with them instead of account value (which is inflated by fake ‘bonus’ units and hidden upfront fees). I’m keen to see the split given 10 years has pass.
          Actually really interested to see the fine print of the FPI P15 and see how it compares to the current version. I speculate the fees & penalties were slighter better (commission arms race between FPI/Zurich/OM in recent times would have resulted in investor getting hit harder)
          FYI, lowering the monthly contribution or taking a holiday break or taking partial payment has NO impact on the fees – fine print allows them to deduct fees at the highest level (ie. they take fees at the ‘expected’ portfolio value and NOT the actual value)
          Your funds are wrapped in layers and layers of unnecessary fees, with everyone getting their cut and leaving you with the dredges and losses. Why don’t you scrap it completely, invest in the funds directly (cutting out all the middlemen) and keeping all the profits yourself?
          The last 7 years has been pretty good. Even with the GFC is 08/09, your money should be up ~100% over the past 10 years, if you kick the useless insurance salesman/company to the curb!

  3. Jonny says:

    After reading Millionaire teacher last year I switched my funds in FP to 3 of the 4 you suggested above. Thanks for great advice!

  4. Stan Covington says:

    Hi Andrew. Is it possible for you to make the same low-cost fund options for Royal Skandia also? Thanks, Stan

  5. Stan Covington says:

    Sorry, Andrew, just got the email now. Actually Old Mutual gobbled up Royal Skandia.

    Here is the link to the fund choices

    Here are the three I am in if that helps.
    85136 OMI IM USD Invesco Bond (20%)
    97357 OMI IM GBP F & C Investment Trust USD (40%)
    97708 OMI IM USD Pictet USA Index (40%)

    Any help would be great.

    • Stan,

      Your portfolio is responsibly diversified. I hope you don’t mind me asking a few questions. How long have you had it? How did this investment firm contact you? Have you ever asked what your redemption penalties would be, if you sold? How long is your policy term date for? Did your advisor tell you that you would be hammered with penalties for selling early, or was that a surprise to you?

      • Douglas Wilson says:

        Hi Andrew,

        I am in a similar position to Stan. I am 18 months into a 15 year plan with OMI and I want out. I have been given the following statement on the surrender value (quoted direct):

        Plan term = 15 years
        Since this plan has completed 1 whole plan years since commencement, the Surrender Value Factor (SVF) is 29.3%
        The Penalty-Free Allowance (PFA) is currently $196.13
        The surrender value is calculated as: SVF x (Switch Value of Regular Premium Units – PFA) + PFA = 29.3% x ($40,396.84 – $196.13) + $196.13 = $11,974.93 as at 04/08/2016

        I have currently suspended payments ($2k/month) and was thinking of switching the fund allocation and reducing payments to a minimum ($600/month) in an attempt to at least break even, but I fear any gains will be eaten up by fees.

        I am now inclined to take the money and run, even though I will lose 70% of what I had invested, and start from scratch following the advice in your books. In the long run, my maths – and my gut – tells me this is the best option.

        Any advice would be great.


        • toony says:


          Like Stan and many others, you have been caught up in this expat insurance scam as well. The good news is that your plan is the 15 year and NOT 25 year one!

          15 year plan has a hidden “upfront fee” of 12 months (aka initial units). Every $ you pay in the first 12 months goes straight into their pockets as commission/fees so your account is worthless until they get their pound of flesh!

          The SVF is just the excess amount (in % form) AFTER they have had their feed. (Note how they also use the b.s SVF/PFA terms and dodgy arithmetic to calculate the payout value, in order hide the hidden upfront fees!)

          Payout value
          Upfront fees/commission = 12 months (ie. 24k)
          Extra contribution = 6 months (ie. 12k)
          Therefore you only get ~30% (12k) of your money returned.
          If you were on the 25 year plan:
          Upfront fees/commission = 18 months (ie. 36k)
          Extra contribution = 0 months (you only completed 18 months so far)
          SVF would have been close to $0!

          Paying minimum does nothing – they just calculate ongoing fees based on max (not min) contributions and take it out of your remaining funds. Stay long enough and your current SVF (12k) will become $0!!!

          Your gut instinct is right – take the hit and leave asap!!! There’s no break-even point. Ongoing fees goes up exponentially – the longer you stay the higher the fees they can milk from you (compound interest), the further you fall behind financially, and most importantly, the less time you have to makeup the loss by having a diverse portfolio of index funds!

          • Douglas Wilson says:

            Hi Toony,

            I am happy to report that I took (what was left of) my money and ran away from OMI a couple of months ago. The hit to my ego wasn’t as harsh as I had feared, and I am now in a position to go forward and invest with more knowledge and one hard-earned lesson.

            Thank you for your advice, thank you to Andrew Hallam for writing such brilliant books, and thank you to everyone else who posts on this forum. I cannot recommend you all enough.

            Keep spreading the good word!


          • toony says:


            Well done on getting out! We slowly starve the beast with anyone that escapes 🙂 Do warn others around you of the danger.

            The losses are insignificant a few years down the trap when compared to the much higher returns. Plus the new financial knowledge from Andrew’s book will benefit you the rest of your life! 🙂


  6. darien says:

    Hi Andrew,

    I trust that you are well. I’ve been following this thread to see where it would end up.
    I had a Friends Provident (25 year) fund which I exited after reading your book and this site.
    I’ve since opened a Saxo account and bought VWRD and IGLO.

    I also happen to have an Old Mutual (Royal Skandia – 5 year plan) with $71 000 invested as a lump sum.
    It hasn’t made any profit after a year and a bit. I am talking to my FA and he is trying to get me to stay in it.
    The argument being that active funds will outperform passive funds in a bear market.

    I would love to know what your thoughts are on the makeup of this portfolio.

    98200 OMI IM USD VAM US Mid Cap Growth 13%
    98196 OMI IM USD VAM Driehaus 22%
    98368 OMI IM USD Emirates MENA Top Companies 21%
    97666 OMI IM USD Schroder ISF QEP Gbl Act Val 14%
    Something called a BNP Paribas Autocall Note 30%

    To get out i would take a $7000 hit.

    Your thoughts would be much appreciated.
    Warm regards,

    • Hi Darien,

      I would have to find the links and look up each of the above funds. Apologies, but I don’t have time for that. For something so time consuming, it’s better if my labour can help more than one person. I hope you understand.


  7. Peter says:

    Hi Andrew,

    do you know anything about investing through “BOOM”, the Hong Kong based company? Are you able to offer any insights into using this trader as opposed to “DBS Vickers Securities”? The BOOM link is below:


    Thanks for your time,


  8. Phil says:

    hi Darien,

    As I see your advisor bought you a structured note, you will find it hard to sell the note at par as there is no secondary market. So your surrender cost will be greater than 7k. You will likely take at least a 20% hit on the note alone…also it really does not make sense why your advisor has you invested in Omi mirror funds..mirror funds adds another layer of fees, a lot of advisors use VAM funds as they will pay them a trail…ask the advisor for the Morningstar ratings and reports for the chosen mirror funds. Ask him if the account has access to ETFs, I suspect it does.

    Hope this helps.


    • darien says:

      Hi Phil,

      Thank you for your insight.

      My FA could never fully explain the structured note to me. It seems like a complex product.
      He also told me explicitly that the VAM funds were not mirror funds, but A-Class funds.
      When you say trailing fees, does this mean that each year teh FA will get a kick back from the fund manager? Do you know this as fact?

      After many questions my FA said that my policy is ‘Open Architecture’ and that I have access to ETF’s. But that I should avoid them.
      I am now on the fence, do I buy ETF’s on OM and continue to pay their 1.9% yearly fee or do I take the hit and add the cash to my Saxo account?
      Do you have any thoughts Phil?

      Warm regards,

  9. Phil says:


    Any fund that starts with OMI IM is an Old Mutual International mirror fund, I’m sure. Yes I know for a fact they pay a trail (kick backs) to advisors, also why else would they recommend an underperforming mirror fund, especially when you are investing via an open architecture account. For comparison sake, I compared the returns for the OMI IM USD VAM US Mid Cap Growth to the IShares Russell Mid Cap Growth ETF (IWP), and the difference is significant. VAM 2014 returns – 2.63% Vs. IWP 2014 returns +11.68%. Last 6 months VAM +6.73% Vs. IWP +11.43%. If I were you I would go back to my advisor and ask him/her to justify why they put you in those funds.

    What to do now? The 1.9% fee that you pay for the next 5 years (9.5%) you cannot avoid. If you surrender early, these fees will be deducted out of your account. You see, your advisor has been paid upfront most of the 9.5% when you started your plan. So of course OMI needs to recoup this cost to them. Beside this fee, there is probably an admin fee of around GBP100 per quarter. So your yearly fees are in the range of 2.76% per annum based on an account size US71K. The good news is after 5 years the 1.9% drops off and you are only left with the admin fee, but still more expensive than if you invested via SAXO or other online brokers.

    The structure note that you hold is another issue you need to take into consideration. I would assume you would take a big hit on the note if you decided to sell it early, as there is no secondary market. Assuming at least another 20% hair-cut on the note, would mean another $4,260 in costs to surrender your plan. So you are looking at $11,260 to surrender the plan or about 15% of your portfolio.

    I’d recommend staying in the account at least until the note is called or expires. Also, if I were you I would demand that they place you in a portfolio of ETFs. If you decided not to go into ETFs demand more out of your advisor, have them explain and show you evidence why these funds are the best available options.

    Good luck.


  10. Tricky Woo says:

    HI Andrew,
    Thanks to your advice I went on to moneychimp.com and found that even though my spouse would lose about $20,000 (get back about $20,000 her value was about $44,000) because of FPI’s heinous and horrendous surrender value fees and penalties we figured out that in the long run, if she were to take it out now and put that $20,000 into our diversified indexed funds with Vanguard that over the next 13 years (which is what she had left on the policy) she would end up making more than she would lose with the surrender value. The problem is exactly as you say fees eat away at so much of it and then you add the natural course of inflation the money is consistently losing value as the months and years wind on.

    Also piece of mind not having to deal with FPI is also a very freeing and joyous feeling. It was not fun being scammed and mislead (we asked the right questions but were lied to by the seller of these products) by them and it is nice not having anything else to do with them.

    Thanks for your advice and the 2 great books! I love them both and re-read them all the time.

  11. Nick1411 says:

    Hi Andrew,

    Great advice and book(s), after finally making a choice between complete surrender on a FP investment, or partial ‘hit’ I have taken the second option and taken out £30,000 and left 20,000 in (which I have reduced the monthly ‘investment’ to a bare minimum (and will also look at switching the current portfolio to some of the above funds now. Just opened a Saxo account in HK and will look to invest in either a couch potato strategy or similar to your advice in the book, the question I have is whether to ‘stick’ with the bond fund, (I’m 41, so in theory would be around 40% exposure), also I will be leaving HK for a Europe posting and not sure if it makes sense to take the current MPF I have accumulated in Hong Kong (I believe like Singapore you can take ‘once’ when leaving and subsequently invest it further, or just leave it as separate retirement based fund (over 10 years, around 300,000HK accumulated, appreciate any input on above issues, thanks.

    • Hi Nick,

      If you can take that money without penalty, and pull it into the same portfolio as your other funds, that makes sense. By doing so, you can allocate it into the markets/currencies you want to.


  12. Tricia says:

    I am 5 months into an FP policy and have only just discovered the actual fees as well as the 18th month lock in clause. I stand to lose USD16k (USD3300 monthly premiums) if I stop the policy now so I have asked FP about my options and no response yet (can’t get a straight answer out of my FA either but don’t expect much as he basically lied that fees were under 2% ). If anyone has had a similar experience with FP, can you please advise if I can encash in full in the 19th month, if I continue pay up to 18 months, or will there be penalties? Or if I pay up to 18 months and then not make any further payments till the end of the term ie 20130, will I get my money back in full (depending on the funds’performance of course)? Or should I just take the hit and cut my losses right now?

    • Hi Tricia,

      I’m sorry to hear that you were sold one of these horrible products. Much depends on the term length of the policy. If your term is a long one (20 years or so) it could be a very long time before you can remove your money, penalty free. Keep trying to contact the advisor. If that doesn’t work, try the company itself. They’ll have specific answers to your questions.

      Again, I’m so sorry. These policies shouldn’t be legal, without full disclosure. But the commissions paid to brokers are huge. That’s why they don’t tell you everything. That’s why they lie.

  13. Yoko says:

    I am stuck in FP with Banner JP, Isle of Man (I am Cdn). I haven’t told my JP spouse about this as I was entrusted to invest our savings… I feel terrible. We have lost money with FP in the last 4 years; the numbers seem to only go down.

    Hats off to the folks who are understanding all the lingo here, but I for one, feel very lost. I will read your books once they arrive, Andrew – and until I actually understand what to do – until then I am looking to lessen the bleed:

    1- We have a lump sum 37K that is presently worth less than what we put in (J99, L19, M82, P60, L21).

    2- We also are locked in for 16 more years, paying 1K monthly (J60, J99, L19, M65, M82, R11, R86). The statement amount there is also less than what we have paid in.

    So, until I understand this better, is it safe to say that I request Banner to change to the sample British portfolio you posted in the article ASAP?

    Thank you so much. Altho I must say I was much happier while living in ignorance… Sigh.

    • Hello Yoko,

      Yes, consider switching to the diversified portfolio sample here. The fact that you have lost money in 4 years is startling. The markets have risen plenty. This, in itself, tells me that your money was not properly diversified. When the whole tide rises, and your money doesn’t, that means it’s not really part of the ocean, but languishing somewhere in a ditch instead.

      • Yoko says:

        Thank you so much for the advice. I am still getting over the shock of this mess.

        • Yoko says:

          And your books arrived today in the mail. Looking forward to reading them. I have been scouring this website too and I can’t thank you enough. However, it does seem that as a Cdn residing in Japan, there are not many options. I gotta say, at this point, the idea of going to Singapore is just terrifying (not to mention I would have to convince my JP family… Ha ha ha). So, how about Interactive Brokers?

  14. Yoko says:

    Oh and yeah, loosing money within the first four years, it is so depressing. Did you hear of this unregulated fund J99 Brandeaux? Seems like it was suspended and now dissolved or some mumbo jumbo..%&!. Can we swear on this site?

  15. Oliver says:

    Hi Andrew
    I want to thank you hugely for all your work you have done here.
    We were deep in the process of getting sold a Friends Provident fund by a very very persistent salesman from the Helney group last year. I was feeling pretty good with myself for thinking about our financial future and making the decision to put money away. I stumbled across your website the night before we were going in to sign on the dotted line… thank goodness.

    As I’m someone who is not typically very financially savvy, i have found that your writing on both this site and inside your books has really helped open my eyes and start to take allot more interest and care with what i do with my savings. In particular your latest book has really started me on a journey towards putting together a sensible retirement plan which is something that i had honestly taken for granted before.

    Thanks once again for your amazing work and for sharing your knowledge.

  16. Patria Gates says:

    we invest so far around 30,000 with FP. but not sure if i want to keep the money with them, what should I do? im not sure how much i have to pay if i want to close the account, or if I even can do that, also what happened with the money that i already invested in case, i don’t want to invest more, and just leave the money that its already there to have profits?


  17. Yoko says:

    Just another quick praise to Andrew here. It is remarkable how you respond to your readers so quickly and thoughtfully. It means so much to us and it is rare indeed! Thank you again!

  18. David says:

    Hi Andrew,

    Thanks for the good advices on your book. I am a 37 years old french guy who after 10 years in Singapore plan to move back in Europe. Before that I would like to invest part of my saving in Singapore on Index funds. I am also looking at options to do so in Luxemboug. What would be your advice for good Index fund companies in Singapore? Is it actually a good or bad strategy to open an index fund in Singapore if I am based in Europe soon? In which currency shall I invest? Many questions, I hope you can help! Thanks,


  19. KL Expat says:

    Hi Andrew,

    Been living in Asia for almost 3 years now and been fending off non-stop calls from various ‘financial advisers’ for most of that period – primarily because I didn’t have that much to actually invest. However, recently sold a property back in the UK (I had been letting it out, but the tenant started causing too many headaches) and this provided me with a lump sum to invest. Anyway, as a result of this, I finally took the plunge and started some initial discussions with a seemingly legit advisor who I had met through other business dealings.

    Anyway, he advised placing the bulk of my available free cash in a Friends Provident ‘Reserve’ Investment Bond with a five year term. I didn’t want to commit any longer as have a 3 month old baby and may need to use some of that cash for schooling around that time. Anyway, he explained how I could track my money and withdraw it at any time – and also the benefit of it being offshore and therefore easily transferable to my next of kin (wife) who is not a British national in the event that I should pass away.

    Anyway, I received various documentation from him today and noted the high charges. This in turn prompted me to do some online research – which in turn led me here. I am going back to the advisor for his feedback and comments on the various charges.

    As a relative newcomer to the ‘investment’ scene the FPI product does appeal to me in that its visible and relatively stress free (I am not one for micromanaging things) and the advisor has highlighted that even with charges in the 3 to 4% range I will still be making more money than leaving the money in the bank in the UK – however, this page has rung some alarm bells for me.

    I also have two inactive SIP pension funds back in the UK. The advisor was also making FPI suggestions for those – but fortunately/unfortunately I don’t have any of the pension details here with me – they are all back in the UK in storage. Will be going back in October for a visit – any advice on whether it is worth bringing them offshore? At this stage I am not sure if I will end up retiring back in the UK or in this part of the world (my wife is Filipino).


    • KL Expat,

      I’m glad you found this website. Do not pay 3-4% annual charges to have your money invested. That’s highway robbery. If you were to ask Warren Buffett how to invest, he would suggest that you buy index funds. These would cost you about 0.2% in annual fees. You would have access to the money at any time. And you would have plenty of diversification. Unfortunately, brokers won’t want you to buy them. They can’t make money when you do so. I’ve written a book explaining exactly how you can buy them from KL, utilising a global brokerage. The book also has plenty of background information that I think you will find useful. Here’s the Amazon UK link: http://www.amazon.co.uk/The-Global-Expatriates-Guide-Investing/dp/1119020980

  20. Ayesha Adams says:

    Hi Andrew
    So pleased to have found some simple advice at last.
    I live in Dubai and unfortunately ended up dealing with an unscrupulous advisor from de Vere.
    I have invested £115k in a FPI 25 year plan over the last 7 years. Sadly, due to excessive fees and poor performance it has a current value of £105.
    Have decided to take the maximum surrender option and remove £85k from the plan. I’m now using an advisor with St James Place and he has advised going into one of their plans with much lower fees at 2%.
    Just want to check if this sounds like a sensible option?



    • Ayesha,

      Please don’t pay anyone 2% in fees. I wrote a book explaining much better options: http://bit.ly/globalexpat


    • Phil says:

      The sjp product is not a cheap product, it’s still an insurance based investment plan that uses some kind of mirror fund scheme with hidden fees. I would recommend Looking for a fee only advisor or invest into ETFs yourself.

    • HK Expat says:

      Hi Ayesha,

      You should know that I also got sold FPI, but buy someone from ST.James Place. So be wary – seems like they all sell the same stuff.

      • Hi David,

        Because you have my book for expat investing, the easiest way to help you is to encourage you to read chapter 6.
        My personal investment portfolio costs me about 0.12% per year in annual fees. With FPI, you are paying about 4% per year. So if the markets make 4%, you will average a return of 0%. If the markets average 7% per year, you will break even with inflation, after paying 4% in fees. Your advisor may not even realize the extent of the fees that you are paying. If you read that chapter, you will likely know more than he does.


        • HK Expat says:

          Thanks Andrew,

          I’ll get right on it and try and mitigate any losses we’ve made so far. Thanks for the reply. I’m sure you will see me posting around here more often.


  21. Chris says:

    Hi Andrew,

    2 years ago i took out a 25 year policy with FP through a broker, naively thinking i was providing for my future.

    I stopped contributions after reading this article.

    My question is what to do now? I have funds of about £8,000 – but if i surrender now i can only get around £1,500.

    I asked FP to provide projections at 5% and 9%. The 5% growth projection actually has my fund worth less in 25 years than it is now! I asked for the projections to include my broker’s charges and commission so i can only assume this is the reason. How disappointing!

    My question is – should i surrender it now and take the big hit to at least get something back in the meantime?

    I look forward to your reply and thank you for shining light on this unscrupulous practice!

    • Hi Chris,

      This is a tough one. If you allow your broker to make fund decisions then the damage would be far more substantial than the fees alone. Most of those guys are sales reps who love stuffing yesterday’s winners into portfolios because it’s an easy sell.

      If you, however, take the penalty and invest the remaining amount intelligently with low cost, diversified ETFs that you rebalance once a year, the math strongly turns in your favor. The ultimate decision, however, has to be yours.


      • Ryan says:


        You can get out. We had a similar issue with FP. Usual story, a broker sold us the product and forgot to mention all the finer details. However, in one of the letters from the broker he stated that the fees of 1.5% per quarter on the “initial units” (1.5% per quarter, what was I thinking???) would only last 18months, when in fact they last for the entire term of the policy. If you can find something out of place in a letter against the terms in their policy you can get out. However, you have to be absolutely relentless. They will say no ten times before they say yes.

        It took 8months but we saved ourselves $10,000 or more in surrender fees. I would print off any communication with your broker, compare it against the FP produce guide and look for discrepancies.

  22. Chris says:

    Thanks Andrew – really appreciate you taking the time to reply. Very grateful i found your site before i invested even more than i had already.

    I will pay the penalty and look to invest elsewhere i think.

  23. Peter says:

    Andrew ,
    Thanks for all your solid advice both in your books and on the website. I also bought into FPI, but after reading your book I transferred my funds within FPI into low cost Vanguard funds. This has meant that despite the high FPI costs, I have still done ok. Anyway my FPI fund matures in January 2016 and then I am immediately taking the fund (probably about 35-40,000 GBP) and I want to know what is the cheapest way to pay into Vanguard funds given that I am based in Indonesia, and I’m going to retire in Asia, rather than go back to the UK. Is opening a DBS Vickers account possible?

    • Peter,

      DBS Vickers may be your only option, from Indonesia. But as I mentioned in my book, you will have to personally come to Singapore to open a general savings account and the investment account.


  24. HK Expat says:

    Hi Andrew,

    What an amazing website. Also nice that you take the time to reply to peoples comments here. I have both your books, buy have yet to read them.

    I wish I’d found this site sooner. Unfortunately I was sold a 25 year FPI Policy from one of the brokerage firms mentioned in the comments section here. I’ll read your books for tips and also ask my broker for his take on the fee situation.

    We are based in HK and intend to stay here for as long as possible. I just have a question re: expense ratios. You mention the lower the better, but is there a top end that you would consider the highest a fund would charge / cost?

    Also I’m sure you must be busy, but if you’re able to look into sample HK portfolio that would be helpful.

    Thank You!

  25. Shanghai Expat says:

    Hi Andrew, this website and both your books are superb. I’ve bought both and am reading them simultaneously, about half way through now and what you have written resonates on every level. Thank you.

    In short, this post is about wanting to get out of FPI, but do not know how best to measure when to do so.

    I am a 37 year old South African living and working in Shanghai, China and sure enough everything you have written in this blog post has happened to me including still owning the Tempelton BRIC fund. I was sold a 25 years FPI investment by a FA who came to our company in 2006. Having decided to invest 10% of my income no matter what this seemed the best option. I remain focused on the 10% principle yet want to make changes to where this money goes to best increase my odds of a sound retirement income. I have stopped my monthly contributions to the policy 2 years ago and have kept 10% of my salary in my bank account.

    Thanks to your books I have a far better understanding of what I am currently mixed up in and what I should really be doing. The problem is how to transition from where I am to being aligned with your concepts. As you say, no use in crying over spilled milk, the key for me is making a proactive solution moving forward.

    So last week I contacted FPI and having invested USD25k to date, the policy is worth USD22k, they are allowing me to surrender my policy (after deductions for “Surrender Value” and “Surrender penalty”) for USD 19k. That’s a 24% loss on the money invested to date. They say the turn around time is 3 weeks to place the money into a designated account of my choice.

    My questions to you (and/or the community) are:

    1. What is the best way to work out whether taking the 24% loss now is worth it?
    2. Or does one sit on this FPI policy and wait for the market/investment to gain before selling the policy? (Still taking the penalties but obviously a lesser hit)
    3. Is changing the make up of the FPI policy (to what you mentioned) worth it? ie. One of readers did just that, but are we not still at the mercy of FPI fees?
    3.1. Continue investing into the newly structured FPI policy?
    3.2. Or just restructure it and leave it? (although fees may eat away at this) while then investing new monthly/quarterly contributions into a Saxo/DBS Vickers account?

    FYI – These are my current investments with FPI:

    P56 BlackRock GF Japan Opportunitie
    P60 LeggMason Martin Currie Global
    R24 VAM Driehaus
    P02 Vanguard US500 Stock Index Fund
    P58 Templeton Bric

    This is what my FA has said I should invest in when I start investing in FPI again:
    Investment Choice

    P48 Baring Eastern Europe (10%)
    R80 Deutsche Invest I Africa (20%)
    P17 CGWM Select Global Affinity (10%)
    P58 Templeton Bric (20%)
    P60 LeggMason Martin Currie Global (20%)
    P52 Templeton Latin America (10%)
    J03 Baring Asia Growth (10%)

    Please excuse the length and details but I found that people who posted specifics really helped me.

    Again I cannot thank you enough for the books and site. I’ve recommended your strategies and books to over 7 colleagues now. Sure enough each has a similar story.

    • Charlie says:

      Hi Shanghai Expat,

      My story is the same as yours with FPI. I took the hit of 30% loss and opened a Saxo account.
      The new portfolio suggested from your FA is worse than the first one. It is not diversified and is very risky. He is probably hoping to make some short term gains by investing so much in Emerging Markets which are currently down.

      The choice is your, but I assume that Andrew will agree, at your age you have time still to take the hit and start again.


      • Shanghai Expat says:

        Charlie, thank you for the reply. It’s much appreciated. Waiting to hear how much I can get out now without incurring penalties. I sent off paperwork to Saxo in Shanghai last Friday and they’ve helpful. I’ll be calling TD Direct Investing this week.

  26. Simon says:

    Hi Andrew,

    Since reading your books I have built a diversified portfolio of index funds and I’m happy with that.

    As per this thread, can you advise what is the best out of a bad situation I can make with my Vista plan (25yr)?

    List of funds: http://webfund6.financialexpress.net/clients/zil/pricetable.aspx?user=public&range=vista&Currency=USD&Region=sgpr

    The carnage started back in 2011 and I have invested 85K, the fund now worth 103K but my surrender penalty is 62K, so the penalty would be losing 22K of my own initial investments.

    I don’t want to take that hit just now and I’m paying the minimum contributions with the hope of breaking even in the next few years and giving them 2 fingers!

    I am an Irish resident in Singapore, I would be greatly interested in your feedback on their funds taking exchange rates into account. Any feedback on taking a bet on Oil funds offered by Blackrock while low with a 3 year timeframe to break even (hopefully)?


    • Hi Si,

      I don’t have time to go through all of the fund options that your Vista plan allows (and the link didn’t work). But I think you could do it yourself. You’ll need global diversification with stocks. If you’re Irish and planning to go back there one day, exposure to the pound with a low cost bond fund would be ideal as well. You can find out the relative expenses on each fund when you Google them.

      As for speculating on an asset class, I don’t personally like to do that. It can be a slippery slope, once we start to speculate.


  27. Robert says:

    I was stuck in horrendously underforming FP funds since 2007, and in that time they lost money. I was terrified of the surrender penalties but found that they applied only to the first 18 months of premiums “invested” with them. I decided to take the hit so I could at least invest the balance in something that has much better prospects going forward. Putting my money in a shoebox would have been better than going through FP!

    I’m rereading the chapter on Australian investing in Andrew’s book and am trying to settle on what kind of allocation for fundamental indexing.

  28. Bibi says:

    I am very very very sad as I type this comment and trying to figure out where to move forward with my retirement planning. I will try to keep my sad story short.

    I began investing in FPI around 9 years ago. At the time, I had no idea about all this. My “broker” kept insisting I should increase my savings. Initially I did but as time went on, I realised it looked like it wasn’t making any money. After several unsatisfactory explanations from him and doing the maths and seeing that if I pulled out, I would lose most of the money there, I just dropped the contribution to the barest minimum while I tried to figure out what to do. Thank God I figured this one out instead of paying $1,000 every month like he advice me to. I got very busy with work and life and again let it go by the side.

    Eventually in October last year, I started poking and prodding and doing more research and finally understood I had been screwed over. I had a meeting with my alleged broker last week and told him that by the time they take their 5% fee every time I make a contribution over the entire lifetime of the policy, how in the name of God will I have enough money by the time I retire? How can you tell me my investment can make 10% every year? Guaranteed? Are you a genie? Or a money doubler? I might not understand the exact math behind it but I know enough to realise this policy isn’t making sense. Whatever interest this policy garners every year basically disappears into the fees???!?!?!?!?!

    Guess what he tried to get me to do? Increase my contributions. Apparently, if I increase my contributions to a certain amount, the 5% fee won’t make such a dent in the interest. Ehn. But that makes no sense. If I increase the contribution, they still charge their fees. The dent is still there. I will still notice it and I’ll still be mad!

    I told him I was very upset and didn’t want to talk to him any more and refused to give him the cheques for this year.

    I was up all night thinking of what I’m going to do about this. If I pull out, I will lose a lot of money. I know I can withdraw as much as I can and just leave the rest there and forget about it but what will I do next? I need a retirement plan!!! I’m in my 30s and was really looking forward to easing up on working so hard by the time I’m 50.

    I am not destitute. However, I work really hard to put together my retirement plan and to realise after 9 years that I was just donating free money to FPI is heartbreaking………:(

    • Robert says:

      I’m in my 40s so you at least have time on your side! The surrender value with my FPI account was based only on the first 18 months of contributions, which meant I got about 90% of my money out. Conditions would vary based on which plan you had (mine was a Zenith plan), but you might find that the hit you take is not as big as you fear. Insist on getting that surrender value.

      • Bibi says:

        Thanks. I have a premier plan and asked for the surrender after I wrote this comment. I would lost nearly 40% of all the money I’ve put in there. It seems insane that I can’t sue anyone for this. It’s my money and I worked for it. Why can’t I have all of it back? I mean I know why but anyway…..

        After that, I asked for the maximum I could withdraw and I’m waiting on a response to that email now. Currently researching low cost index funds and Andrew’s other suggestions.

        I’m grateful that I’m at least able bodied enough to rectify this mistake before it was too late….

  29. Phil says:

    Knowing these products well, I kind of understanding why your broker said you should increase your premium from the minimum. The fees are not exactly 5% of everything you contribute. The bulk of the fees are based on the initial units (the fist 18 months of contributions). This amount is charged 6% per annum every year of the plan. Anything you contribute after the first 18 months is called accumulated units and this amount does not suffer from the same charge. So the more you have in accumulated units the lower your overall fees on a percentage basis. Regardless, it’s still not a good plan and parking your money in low cost index funds is a much better option.

  30. JPExpat says:

    I am 48 years old, and have had Friends provident for the last 10 years. It was sold to me as an Endownment policy here in Japan for an advisor to cover the mortgage on an investment property abroad. The sales pitch was why pay a yen loan principal with an interest ratr of cira 1% when you can make 6% with this Friends provident policy……
    Looking at what I have paid into this policy lately I have made nothing in 10 years…. and now have a surrender fee if I cash in the policy… I have tried 3 different financial advisors in that 10 year period and have adjusted the portfolio numerous times…. Well as you said Andrew this is a nasty product…. I only came across your name on the internet today… I will buy your books today and look for other options… I wonder what to do now though now with the markets falling…. should I surrender as much as possible or wait for the markets to recover…
    Anyway I need to read your books and plan my exit from this product… Being 48 I have left this a bit late, but guess better late than never, this policy will never make money due to the fees…

    • Hi JP Expat,

      I’m sorry to hear that they sold you this product. Here’s one thing to consider about selling now. OK, you will take a penalty hit for early redemption. But don’t be discouraged by a down market. True, you should have made plenty of money over the past 10 years. But the markets have fallen about 10% since January. As such, there’s a discount sale on now. If you sell now, you can buy something much more efficient (a lower cost, diversified portfolio) with the proceeds. And you should get a decent deal on it. If you haven’t read my expat book, it should help you a lot. Here’s the link to Amazon: http://bit.ly/globalexpat


  31. JPExpat says:

    Hi Andrew,
    I just bought your book, the opening line “Some people like investing, Most people don’t* rings very true….
    Its the reason I have been using financial advisors… I will take your advise and cut loose of this friends provident product.

    You know I have been paying these do called adivisors so much money over the years for bad advice and here you are offering honest/good advice for free. Just goes to show these so called financial advisoes are con men who are just looking out for their commisions and have no concern for the customer/client

    Thanks appreciate your help

    • Saracen says:

      Yes, I am quite sure Andrew sold you his book for free JPExpat! If so, we can say that there is no conflict of interest in him and his work. However, I suspect that he is lining his own pockets with sales of his book and earning commission (which he actually discloses, good for him) on diverting investors away from 200 year old European investment houses and instead towards online investment tools which offer little, if any, history to be bench-marked on.

      • Jen says:

        He is earning money from his own work…why do you seem so angry that he is showing expats there is a cheaper way to invest and make their money then old eu investment houses? Life changes all the time and there is progress….so it’s great that people learn to diy invest and end up with what would have been fees in their pockets. For those who don,t want to diy they can use older established products. It’s personal choice…and people have a right to know all investment options and then choose. I always doubt if going diy is right for me…but when I read posts like urs, which appear to demean someone showing others how to invest low cost…which is different from your way…then I know I have. Any one who cannot accept there are different ways to invest and appear to want people to only invest as per the past 200yrs does not lend them self to trust…certainly not by me anyways.

  32. Gohar says:

    Hi, can you advise on the Zurich International vista educational plan. I have recently joined this saving plan which is over 12 years. I was informed that after 18 months no penalty applies if I want to take cancel and would even get a small profit based on the performance of any but won’t lose the principle savings after 18 months. I just started so if it’s not smart then I’m happy to let go of couple of months than loosing more.
    Thank you

  33. Matt Prebble says:

    Noticing that the last update to this article was a year ago, I was wondering if the portfolio sample for British investors is still the best one considering the current Brexit issue. Would the portfolio still be suitable, should it be adjusted or should we wait until after the referendum before building a portfolio?

    • Matt,

      No political or economic circumstance should alter a portfolio’s construction. Ever.
      Yes, this portfolio would still be viable. But of course, if you can stomach taking the financial hit and ditching your Friends Provident plan, you will make more money in the long run (even after the penalty) with a low cost, diversified portfolio of index funds.


  34. Expat Ade says:

    I have a Friends Provident International policy that has been running for 12 years. It is due to mature in 5 years. I was advised to invest in 5 different funds all of which are emerging markets. China, Russia, India etc. My policy is currently valued at 5% above what I paid in. I am looking at a better alternative. I looked at the investment choices that Friends Provident International offers and they seem very limited. Do you have any suggestions. I was thinking of something that followed the global share and bond markets. Many thanks in advance.

    • Ash says:

      Expat Ade…read Andrew’s books. They’re extremely easy to understand and answer your question comprehensively. Pull your money and invest in index funds. My 2c

  35. Ash says:

    Hi Andrew,

    First of all, congratulations on the books…I only wish I’d found them earlier! A great read and part of my now-strategy of managing our non-Zurich investments!

    While living in Singapore I was sold into a 25-year Zurich Vista fund, to which we contributed over $80k SGD during our three years there.

    I’ve since learned, the hard way, just how restrictive and immoral such a product is…however as you point out in one of your other articles…I may just need to make the most of a bad situation.

    We’ve repatriated to Australia and have since ceased contributing to the fund, putting the contributions on hold (permanently!). The portfolio is approximately $130k SG in value however with over 21years remaining in the policy, our surrender value is still horrendous and only in the order of $55k…so we wouldn’t even recoup our capital. My bruised ego wants to pull it out and invest it all into index funds and be done with it, but it’s hard to think of pulling out less then we diligently put in over several years.

    If I intend on keeping the policy on hold until such time as the surrender value makes sense for us to to extract our money. Side note: I’ve calculated the approximate year this makes sense by creating an Excel model that compares keeping the money in Vista, vs. pulling it out each year and incurring the penalty, before reinvesting into a balanced index fund portfolio as per your book, in order to see when the breakeven point would be. (note: I used a 7% growth variable to compare both portfolios after fees )…which I calculated would not be for another couple of years yet…maybe year 7 or 8.

    Until then, I plan to rebalance the policy with ~ 35% exposed to global bonds, 35% global equities and some more local equity index.

    As a 43yr old Australian, would you be able to recommend three Vista funds that would be suitable?

    So far I’ve found: ZI BlackRock Global Funds, Global Government Bond (for global bonds), ZI Fidelity International, Global Equity (for global equity), but none that are expose to the Australian equity or bond markets.

    What would you recommend?

    Thanks in advance, Ash

    • Anonymous says:

      Hi Ash,

      They don’t appear to offer a specific fund that attracts the Australian market. But that shouldn’t be a problem. Open an account with TD Direct International and buy an Australian market ETF with some of the money you can redeem from your offshore pension plan. Some of that money should be redeemable, penalty free. If not, just add fresh money to your TD Direct International account, putting a strong emphasis on the Aussie stock index.
      I hope that helps! And if you have a minute to write a quick review of my book, that would be great. http://bit.ly/globalexpat

      • Ash says:

        Thanks Andrew!

        I can safely pull ~SG$30k penalty free so will look into putting that into TD Direct International while I wait for a more favourable termination penalty on the remainder.

        Happy to write up a review for your book.

        Thanks again,

    • toony says:

      Hi Ash,

      Definitely recommend what you said to Expat Ade to yourself as well – “Pull your money and invest in index funds”

      In the immortal words of Admiral Ackbar “IT’S A TRAP”. Close up the Zurich ASAP – they have trapped you once already and trying to double trap you through fear! Putting contributions on hold actually makes things worst…not better 🙁

      1. Gives them more time to bleed you of extra fees from the accumulated units
      2. You lose valuable time that the remaining funds could be earning to make back the loses, and
      3. Hold thing will constantly play on your mind and not allow you to move on!

      This post explains the mechanics of the scam – both initial trap and exiting trap you are facing now.

      Basically, there’s NO exit/surrender fees!!! (all smoke and mirror here) It’s actually and upfront, non refundable fee to start the account! By saying it’s a ‘exit/surrender’ fee, they exploit the human emotional fear of loss (vs joy of gain) to keep you in the game as long as possible!

      *spoiler alert* Every extra year they keep you hanging on (by pretending to reduce the surrender fee (lets say $8k), they get to bleed you and extra 10-12k from your accumulation units. Since you are not adding to the accumulation units, it will reach 0 in a few years (ie they have bleed you dry and there’s NOTHING left in the account!!! (I really hope you can understand this important point – get out NOW while your account still has a few $ left in it!)

      • Ash says:

        Thanks Toony, pretty interesting article and blog. In hindsight…:)

        I agree, it’s very shoddy that I’m losing ~$7k PA in fees (ICP recovery + portfolio mgmt fees), but by leaving a $130k policy from say year 3 to year 4, or until even year 5, makes a positive difference to the surrender value that is significantly more than the $7k PA in fees being lost.

        I think there is value in leaving the exit for a few years, especially in the first four to five years where the surrender penalty for Vista is 100% for years 1 and 2, then drops to 65% in year 3, then 46% in year 4, 34% in year 5 on a reducing scale.

        I’ll go through the math again but it looks to me that waiting until after my year 4 anniversary is the earliest I can pull my portfolio with maximum effect, even with annual fees.

        However I’m going to look at Andrew’s advice and pull the penalty-fee component ASAP and put it to work, so the math might look different as a result.

        Thanks for the detailed response and pointer to the HK blog. Makes my blood boil that these companies are allowed to get away with it. For all intents and purposes, Zurich has a good name in Australia….

        Thanks again

    • toony says:

      Since you have bought Andrew’s books already, I do have some hints on setting up your low-cost index fund portfolio now you are back in Aus. (I’m an Aussie too!)

      Get yourself a trading account – I recommend IB (*small caveat about US death tax) or you can simply use something easier but more expensive like etrade via ANZ/directshare via StGeorge etc.

      1. Work out your AA (asset allocation) to assess your personal risk tolerance (https://personal.vanguard.com/us/FundsInvQuestionnaire)

      I highly recommend you using vanguard to build up your entire portfolio (currently best by a mile) – https://www.vanguardinvestments.com.au/retail/jsp/investments/all-products#/etf
      2. For equity portion, I recommend:
      a) Domestic – VAS
      c) International – VGS
      I prefer this pair compared to the VTS/VEU pair. Although these 2 are slight cheaper, you are open to US/AUS currency fluctuation. Also VAS/VGS was specially designed to give you franking credits on your tax return and can div reinvestment automatically to save trading costs. (I use VAS/VGS for my Aus account and use VTS/VEU for my offshore account while I’m an expat and can’t make use of franking credits. In terms of ‘how much home bias question’ – Aus is only 6% of global markets (6:94 ratio). In my opinion, a home bias somewhere between 20-25% Aus to 75-80% Int is a good starting point to maximize the benefit of global diversification while minimizing volatility of int currency (hopefully I haven’t confused you too much on this point!)

      3. For bond component
      Please use VGB (instead of VIF/VCF/VAF etc) – highest quality gov bonds. I see sooo many ppl chasing slightly higher return with corporate bonds etc and not understanding the use of bonds! Basically, you need support of the strongest bonds when things go bad!!! It’s useless trying to scrap an extra fraction of 1% in income if you don’t have great support from gov bonds in a recession, panic sell and trash you whole portfolio, losing 50% of your entire life savings! (*mumbles something about ‘stay the course’)

      That’s it! 3 funds is all you need! It doesn’t need to get anymore complicated than that!

      Good luck 🙂

      • Ash says:

        Awesome! Thanks, looking at your recommendations this afternoon so will comment later. A 🙂

      • Ash says:


        It’s been a while since I looked at this…but to cut a long story short…I’ve cashed in my Zurich Vista portfolio and taken the lessons learned onboard (and the loss of $ – ouch!)

        I’m now back in Aus and have set up an IG trading account (best low-cost broker I have found) and am about to put the remainder of my Zurich capital into a portfolio of Index ETFs.

        I’ve researched your suggestions and agree that they look the best options, however I have a question regarding the International equity ETF (VGS) as it’s only been in place for a couple of years and is performing poorly YTD. I’m well aware of the global economic environment at present and the noise around Australia potentially heading for a recession in 2017..and of trying to ‘time the market’.so would you still recommend a similar equity split between Aus and Int in this environment?

        I’m just north of 40yr old so plan to put 35%% of my portfolio in the bond index VGB, with the remainder split between VAS / VGS at 15% / 35% . I guess I’m just a little cautious with loading up on VGS in this Trump era as the MSCI as over 50% weighting to the U.S market.

        Any thoughts on this?

        Cheers, Ash

        • Hi Ash,

          I can answer this. It’s important that you don’t speculate. In fact, if you started an investment portfolio of ETFs with global and Australian stock market exposure, the best thing for that portfolio to do (at your age) is for it to drag its feet for 10 years. That’s right. If you can keep adding money and if it doesn’t gain a single dollar in profits, you’ll be loading a catapult that will eventually rocket north with your payload. As corporate earnings keep globally increasing over the next 10 years (and they will) the ideal circumstance for you is to see your portfolio not budge one bit, not including the fresh deposits you are adding.
          I wish I could provide such an understanding (and behavioural infusion) to every investor. I hope you understand how great this would be and the importance of building assets. As a 46 year old myself, I would love to see markets stagnate for a number of years. After all, I am also continuing to add money and I’m far from a “normal” retirement age.


          • Ash says:

            Hi Andrew,

            Thanks for such a quick response.

            Wise words – makes total sense. Thanks 😉

            I’ll put my money to work ASAP and continue to add to the portfolio on a regular basis.

            Your books, in hindsight, have been transformational for me in my investment/wealth strategy. We all have our lessons to learn and journey’s to take so I’m taking my foray into the dodgy world of bogus life insurance products as part of my learning – I feel a little wiser in this space and much more informed as a result of the investigation/research that I undertook as a result of such a nasty sting.

            Perhaps if I hadn’t had this experience I might have my money tied up somewhere else in a low-yield, high-fee managed fund…or be trying to time the market…not very wise strategies given the teachings in your book (that also reflect the Charlie Munger and Warren Buffett view on outperforming markets!)

            Many thanks again Andrew – I’m going to stay connected to this forum in the hope that I can help others through the transition.


        • toony says:

          Hey Ash,
          Well done on getting out and moving into a portfolio of index funds 🙂
          As Andrew already mentioned, don’t let the financial market news sway you away from your long term plans/goals! You have made great fund choices and asset allocation – focus on maintaining that…regardless of what happens (Golden rule – NEVER let financial news alter your portfolio – only let your personal circumstances dictate changes, eg increasing bond % slightly as you transition towards retirement) 🙂
          I rarely focus on the price of the funds…I just make sure the number of shares consistently tick upwards with every pay check 🙂
          15:35 VAS:VGS looks very reasonable to me. My Aussie portfolio uses 20% VAS and 40% VGS (makes it easy for me to rebalance with 1:2 ratio) with only 10% in bonds (VGB). Very aggressive AA for someone -> 40yrs – but I also have 12+ months emergency funds in bank account and NO other debts.
          VGS is a great fund! It tracks ~94% of the world’s developed market for a paltry fee! Return for the past year is misleading as a large chunk of capital (several times larger than normal dividend) was also returned to investors. Franking credits is great as well, especially now you are back in Aus 🙂

          Definitely do stay on the forum and help ppl out if you can…even if it’s just sharing your experience and/or encouraging them to exit the toxic scam!

  36. JPExpat says:

    Hi All,
    Just in case any one is slow to leave Friends Provident due to not wanting to break the relationship with their financial advisor. Here is a link that shows advisors continuing to sell a fund to clients, even though they knew the fund had redemption problems. Investors eventually lost all their money in this fund.. This fund was hosted by Friends Provident


    • toony says:

      Makes your blood boil reading stories like that!

      The more I read about investing, the more I see how incredibly corrupt money makes ppl and companies. Many deals and planning going on behind the scene with one main aim – make a huge amount of money at the expense of the average investor! Some funds when I look at the description and fees, thinking to myself “how could such a fund even exist?”

      These were deliberately created to bleed expat investors of money at the most efficient rate while providing all the parties plausible deniability and ways to get around local/international rules and licences. eg “we only host the funds, see your IFA”, “we only sell the product, see insurance if want many back”, we only insurance licence, talk to fund managers if want to discuss fees etc”

      For offshore investing, there appears to be a very incestuous relationship between insurance companies, insurance brokers (aka IFA), regulators and fund managers!

      Caveat Emptor!

  37. Gwynster says:

    I cannot speak highly enough of Andrew’s books, or his website. I, like 1000’s of others, though I was being a “good boy” setting money aside, only to find that years later it still wasn’t making money in rising markets. Indeed on reading this website and getting AH’s books on Kindle as soon as I could, I found I was well down on what would have been under the proverbial mattress!!! And I understood why.
    Due to poor fund choices inc the Brandeaux J99, and the FP Premier fees, after taking a maximum withdrawal “without penalty”, I am down 1000’s.
    Thanks to Andrew and other contributors I have started a Saxo account and have already seen my money show the returns of the market. I am not greedy and not looking to make millions and slow and steady is fine by me:)
    My question is now whether Saxo offers the best options. I would welcome a response from any one with knowledge or experience on this.

    In short:
    I am British, my wife is Australian and we have recently moved to Singapore, so all the major Brokers are here. Ideally we would like an account that has different currencies, reasonable exchange rates and low holding fees. I have heard that TD Direct may have such an account? Does anyone have any experience of running a “Hallam” type index fund account with them please?

    Sorry about the long email:) I look forward to hearing from anyone who can shed any light.



  38. Prem Kumar says:

    I have invested in FPI over the last 18 months (USD 1000 per month) and the policy is for 20 years. I was going through this link and feel like i was cheated after going through the fine prints. If i want to pull out of this scheme now i will get only 25% of my investment. I still feel it is better to pull out at early stage and suffer the losses rather than paying the premium in this scheme for another 18 years and suffer the losses at later stage

    My only concern is i am going to lose approx $14K if i pull out now. Is there any way to minimise the losses in this scheme



    • toony says:

      It is unfortunate that you got caught in the FPI trap

      The Bad news
      Unfortunately the fine print allows them to steal your 14k, which is the non-refundable, upfront fee (that FPI uses to reward the insurance broker for conning you into signing) for just opening the account. It is disguised as the exit penalty to keep you in the plan as long as possible.

      To minimize your losses, getting out yesterday would have been great, today would have been good or tomorrow if you can!

      If you stay the whole 20 years, their various fees at ~5% pa would eat 62% of your entire portfolio!

      – $1000pa –> $240k contributions
      – portfolio growth @5% –> ~$415k ending value (yearly compounding)
      – However, FPI bleeds you 257k in fees, leaving you ~158k at the end 🙁

      The Good News
      You realized the trap early so can get out with minimal damage. Buy Andrew’s book and learn how to do it safely and cheaply.

      With the lower running costs, you will recoup the 14k loss within 2-3 years 🙂

      • Prem Kumar says:

        Dear Toony,

        Thanks for the inputs..i have started the process of surrendering the policy



        • Chris says:

          I can absolutely confirm the advice given by Andrew and Toony on this. Get out, take the loss as an educational lesson, and set up your own low cost portfolio. By keeping your fees low, you will be amazed how quickly you will recoup your losses and, from then on, you will be far ahead. I know it really hurts to take a loss now – but you will not regret it (and I speak from hard experience as a former FPI victim).

          • Douglas Wilson says:


            I find myself in the same position, and having already stopped the monthly payments will be surrendering my policy this week and following Andrew’s excellent advice (almost finished the first book, and looking forward to starting the second!)

            A friend of mine who works in wealth management would now advise clients ONLY to go for low cost index funds.

            Good luck with your future plans for financial freedom!

  39. Yoko says:

    Andrew, are the sample portfolios above permanent portfolios or do they need to be rebalanced yearly?

  40. Chris says:

    Dear Andrew,

    Unfortunately we’ve also fallen prey to the persistent salesman from Austen Morris selling us a Friends Provident Plan while working in China. Even worse, we signed up for a 25-year one with EUR1,500 premium every month.

    We’re now 6 years into our plan (which means we need to pay 72% of the initial 18 months) and due to financial constraints back,have decided to surrender our policy.

    Our net contribution so far EUR 111,000
    Market Value EUR126,372

    We’ve been told that should we surrender now, our surrender value would be EUR101,000.

    I thought the Initial 18 months would mean:

    EUR1,500x18Months = EUR27,000
    EUR27,000×72% = EUR19,440 as the surrender charge

    When questioned as to how they arrived at their surrender charge, they highlighted to me 4 of our 8 investment portfolios at CURRENT VALUE, and times that by 72% stating “The penalty is obtained from Initial Units which are the first 18 months premiums”. Does that make any sense to you? Is that how it really works?

    On our agreement, it clearly stated:

    Regular premium :EUR1,500
    Initial period: 18 months contribution
    Investible regular premiums: Months 1-18 EUR2437.50
    Months 18+ EUR1,500

    My husband remembers questioning why the first initial 18 months was stated as EUR2437.50 and not our actual payment of EUR1,500, but he can’t actually remember exactly what the answer was but thinks he was persuaded because FP was going to contribute in part for the first first 18 months meaning, EUR1,437.50 would have come from them. But clearly they have not contributed anything as currently, our Total Premiums stand at EUR111,000 which is our paid up premiums alone.

    Upon closer look at their small print under “Paid up/surrender”, it goes like this : If the plan is surrendered before the Option Date, a Surrender Fee will be taken as a percentage of the Initial Units allocated to the policy.”

    Have we got a leg to stand on? Any help would be so gravely appreciated!

  41. Christy says:

    Dear Andrew,

    Unfortunately, while working in China, we also fell prey to a salesman from Austen Morris selling us an FPI plan. Even worse, we signed up for a 25- year plan with a monthly premium of EUR1,500.

    Six years into the plan and due to change in financial circumstance, we’ve decided to surrender. Here’s what they quoted our position:

    Paid up premium: EUR111,000
    Total Interim Value EUR128,274
    Surrender Value: EUR101,000
    Surrender charge EUR28,000

    When questioned as to how they arrived at the surrender charge, they’d added 4 of the 8 investments on our portfolio at CURRENT VALUE and times that by 72%

    On closer inspection of the fine print under Summary of Charges, it says, “If the Plan is surrendered before the Option Date, a Surrender Fee will be taken as a percentage of the Initial Units allocated to the policy.”

    We thought the Initial Units is the first 18 months premium which would be as follows:

    EUR1,500 x 18months = EUR27,000

    EUR27,000 x 72% = EUR19,440 which is the Surrender Charge

    Our policy agreement states:

    Regular premium: EUR1,500
    Initial period: 18 months’ contribution
    Investible regular premium: Month 1-18 EUR2437.50
    Months 18+ EUR1,500

    My husband remember asking why Months 1-18 is stated as EUR2,437.50 instead of the actual premium of EUR1,500. Unfortunately, he can’t remember exactly what the response was but he did remember that he was persuaded because the salesman claimed that FPI was going to contribute to the fund for the first 18 months, which would explain the excess of EUR937.50. However, it really isn’t reflected in our Total Premium as the EUR111,000 is fully our contributions alone.

    What’s our position on this? Have we got a leg to stand on? Any help/advice would be greatly appreciated!

    • toony says:


      Unfortunately you have been caught in this ‘insurance’ scam, masquerading as an investment product, perpetrated by FPI/Austen Morris. There is very little you can do as they hide behind the pathetic IOM regulators, while peddling illegal products (in developed countries with proper regulations) to unsuspecting expats.

      You would need to spend 10x the amount you lost, with only a small chance of succeeding, if you dare to chase after them in court.

      This link explains how this type of scam works:

      Basically, 100% of everything you pay in the first 18 months is just the upfront commission – regardless how long you stay in the scam. Yes, all of it just goes into their back pocket!

      Interim value is completely fake – designed to hide the real value ie. the surrender value and keep you paying into the system as long as possible!

      They deceptively give you a 62.5% ‘bonus’ to each monthly deposit (hence 1500->2437.5), which high enough to mask the scam but not trigger your ‘bs’ alarm).

      Best thing to do is get out asap with what you have left (which is what you are doing anyway) and warn as many friends and colleagues as possible.

      Good luck

  42. Christy says:

    So sorry I posted twice! I thought I lost the first one!

  43. Teigh says:

    (22yrs old) Unfortunately signed up to an FPI plan (Capital Wealth Redemption Plan) thanks to a De Vere salesman coming to the office. Shocked to see the encashment charges are 100%. After 15mths of $500 premiums ($7,500), it is valued at $10,050. Not bad, but another 9 months left of the initial period and so inflexible!. Considering getting out and switching to Interactive Brokers to manage my own portfolio.
    Waiting to hear back what it will cost me, scary to think they hold it hostage like that and the encashment charges barely improve over the contract period….crazy.

    • toony says:


      Ugghhh, any DeVere victim 🙁
      Looks like your ‘initial period’ is 24 months – ie. everything you pay in the first 24 months goes straight into their pocket as hidden fees/commission!

      Basically, you have to pay ~12k of commission upfront, just to open the account! The $10,050 is a mirage…real value of your account is actually ~$0! Yes, approx $0 (ask them for the ‘surrender value’ and see yourself). Don’t let them talk you into continuing. If you give them $4500 (9 months of $500), the real value of your account is still approx $0!!!

      Well done one finding out about it now and not years down the track – you have saved yourself a lot of money!

      Yes, IB with cost cost index funds is best way to go!

      Best wishes.

  44. JPExpat says:

    Hi Andrew/All
    Just an update I was unable to get my remaining money out of Friends Provident without penalty

    This is despite the fact that I provided evidence that the financial advisor I used, was selling funds (LM property fund from Auz) that they they knew was in trouble to clients. This fund eventually crashed and clients lost all their money, which was basically fraud…

    So even I provided evidence that the advisor had no concern for Clients financial well being, FP told me that as I had signed the original Premier policy, they assume that the fees were fully explained to me by this advisor, and that it was sold to me in good fate…

    Its amazing FP can just steal clients money and get away with it….

    • JPExpat,

      I’m so sorry to hear about this.

      Perhaps you can help others. Would you mind writing about this experience? I could post it on this blog. Please let me know if you would be willing to help others with a story. I know it’s still raw. But this could be one of the few ways you could stick it to FP.


      • JPExpat says:

        Hi Andrew

        So it was 2006 when I went to a Financial Advisor here in Tokyo on the recommendation of a friend….

        The advisor ended up selling me an apartment in London using a Yen loan, as the interest rate for Yen at the time was 1.5% Vs 6% for STG in the UK.

        I was concerned about this initially due to the currency risk (1 STG was about 205 Yen at the time) but the advisor said the lowest STG/Yen rate in recent history was about 165 Yen to 1 STG and was unlikely to reach those levels again…
        (On this note 1 STG today is 129 Yen, after the Lehman shock 1 STG hit a low of 118 Yen)

        Anyway the advisor went on to recommend that as the Yen interest rate at the time was so low, to not pay down the loan principal, and invest in the Friends Provident Premier funds which should grow by at least 6%, so I went with this option

        Also to cater for a 20% move in STG/Yen over the period of the Mortgage, the advisor recommended I pay in 20% extra to the FP Premier funds to ensure they covered the loan payment due at the end of the 25-year term

        After taking on the loan, I later learned that the bank required 75% LTV for the property and anything over that due to a currency shift, the bank could demand money to reduce the LTV on this interest only loan.

        I have paid large amounts of money to the bank after the Lehman shock and recently when Brexit occurred.

        In the meantime, the FP Premier funds totally underperformed; over a 10 year period they grew about 5% in total…less than 0.5% per year…

        This financial company I used in Tokyo also heavily sold the LM property Management from Australia (Hosted by Friends Provident) to clients in Japan, even though they were aware of the fact that the fund had halted redemptions. They continued to sell this fund to clients due to the high commissions they were receiving.
        The below link explains this in more detail.


        Some people have lost all their savings when the LM fund crashed, and I have seen in one of the of forums where this was discussed, where it was mentioned that one client has killed himself.

        Considering the above I asked FP to return all my money without penalty. Also when Brexit occurred, I told FP that I needed all my money as the bank were demanding I reduce the LTV on my apartment to 75%.

        Dealing with FP has been difficult, most of the time my emails have gone un-answered. I have had a couple of calls with them, they said they will look into my case, but said as I had signed the documents that the advisor in Tokyo has provided me, they assume all fees were explained to me, and that it was sold to me in good fate…

        They then said if I had an issue with the advisor to contact the financial company who sold me their policy. The financial company in Tokyo has since closed, and FP have provided me their new address, which is a PO box in Bangkok Thailand; no phone number and no website….

        I did some checking and have found that all of the advisors in this financial company have left Japan, the person mentioned in the above article (FJ) is in Singapore at another financial company, and another advisor has joined a company registered in Mauritius…

        At one point I told FP that if they did not return all my money, I would tell my story to other Expats in Japan and South East Asia. They would not change their position… Seemed they could care less… They have never returned my money.

        Somethings I have learned the hard way are:
        1) Do not buy a financial product, or use an advisor recommended by a Friend, do your own due diligence
        2) Educate yourself in regards to investment, read as many books as you can (Be sure to read the Andrew Hallam books 🙂 )
        3) If you have to use a finance advisor, make sure they are not commission based and do a background check on them
        4) Beware of Finance related people in your local expat community who sell financial products
        5) Do not ever sign a document without understanding all the small print and fees

  45. Franky says:

    Hi Andrew & all,

    This is my story: I guess after reading these posts I am starting to panic since I have invested ~50K with FP in a premier advance account since 2015 (by the way, I increased my contribution after 3 qtrs. of payments and I was told that resets the 18month period clock).

    At the moment the value of account is ~100K, so I am surprised that it has been growing nicely (basically doubling in 1.5 years, this is like an outperforming portfolio from what I read in this forum). Sadly After calling the UK office I was told the surrender value is just ~9K, what a terrible liquidity…

    However I was reading into the fine print of the website and it seems that the surrender value is based on the accumulation units (money invested within the initial period), therefore if this portfolio continues growing at this nice rate, I could cancel it and basically break even by taking a big hit in the invested money but not in the big growth/interest (not an ideal scenario abut at least minimizing the damage).

    I am assuming that the surrender value of just ~9K that I was told about is based on the plan not having reach its 18month initial period yet, and therefore penalized heavily if surrendered now.

    Do you guys see any flaws with the logic above, I am not sure whether to cancel it as is, or keep fingers crossed and cancel it right after its initial period (by then I would have invested a total of ~100K)

    I sincerely appreciate your frank advice…

    • toony says:


      Ok, some no nonsense advice.

      Stop ALL payments ASAP and fully understand the situation/scam you have been caught in before making your next move.

      For fast, upfront cash, the insurance broker masquerading as an “independent financial adviser” has truly stitched you up! These insurance products (known as ILAS – investment linked assurance schemes) are arguably the most successful financial scam ever invented (hence banned in developed countries)! (I.e. Much bigger than the infamous 419 Nigerian scam).

      Have a read through this thread and a few other FPI/Zurich related ones. My recent comments here should help you understand your situation, the fine print and work out what to do:

      *hint – the money more you shovel into the account, the more money you are throwing away. The longer you stay in the FPI policy, the more they take from you!

    • Chris says:

      I can only endorse the comments that Andrew, Toony and others have made previously. These schemes are a monumental scam with numerous hidden fees, charges and penalties designed to extract the largest possible amount from your hard-earned savings. As a victim myself, taking the hit and surrendering everything was a very bitter pill to swallow! I lost a substantial amount of money in doing so, but it was one of the best financial decisions I ever made. After switching to a low cost ETF portfolio of the kind that Andrew describes in his books, I recouped my losses in less than 2 years and am well on my way to a sound financial future.

      Do not throw good money after bad – what you put in for the first 18 months is already lost. Hanging on is like buying shares in a terrible company and hoping that, one day, an underwater position will miraculously bounce back. In the meantime, there is a big opportunity cost whilst you could be investing in a much better way.

      The so-called advisors who sell these schemes will offer you many strategies to stay in. Read some of the horror stories here, and on other forums! All are designed to bleed your assets. Just walk away. The good news is that you can recover and do much better – even than 95% of mutual funds – if you are willing to take a disciplined approach. It’s also surprisingly easy to manage your own finances if you are willing to invest a little time.

      That’s my advice for what it’s worth.


  46. Tricia Rego says:

    Dear Andrew, need your advice on how to make the best of a bad situation with a Generali scheme/scam that I have invested USD 815 monthly since 2010. The value is about USD 10,000 lower than contributions and I would like to partially or fully surrender and reduce premiums to min. ie USD 150. This involves a further hit of USD 12k approx. (the 18 months of fees they took from my high premiums). Would you suggest I just take this hit of nearly USD 22k and close the account or reduce premiums to USD 150 and hope that I break even when policy ends in 2025 ? I am aware any further premiums are subject to 1.5% annual fees and need your help to figure out the math.

  47. Oz says:

    well… I just got my surrender valuation from FP by way of my FA. Since August 2012 to now I’ve paid GBP27,000 in premiums.

    I have been told the following: “The max partial withdrawal you can make is about £21,250. If you surrendered the whole thing you’d receive £22,570 but suffer a £10,055 penalty so I’d suggest it’s worth keeping the initial units invested. The initial units are charged at 6%pa”

    6%?!?!?! Haha! with fees like this that’s 10K of pretty dead money. Even if I find a low cost fund as recommended.

    I take solace in the fact I’ve only been stuck in this scam for 5 years and still have 30 working years left to retirement to atone for my naivety. I will see the remaining ‘initial units’ as a reminder to not be so F***ing gullible in future.

    I’m off to open a trading account and buy GBP21,250 of VWRD…

    And Andrew – I’m happy for you to use my story as a word of warning to others.

  48. Chris says:

    Had exactly the same experience Oz. It’s not worth keeping the initial units at all. I would take the extra GBP1,320 under the full surrender and invest that too. If you have a 30-year horizon, you will make back the penalty and some! Keeping any link with FP will be like keeping a decayed tooth instead of pulling it out!

    • Oz says:

      I understand where you are coming from, however I’ve done the math and it seems better to leave the 11k in there rather than pulling out 1,320 and losing the rest.

      My theory is 1,320 @6%pa would be 4,233 after the remaining 20 year term. So as long as I invest the 11k in the same index fund (yep – they have some in the wrapper ironically enough) then even with a 6% ‘headwind’ it’ll still be worth more than the surrender value invested over the same time period.

      It sucks, but until there’s a class action lawsuit against these clowns its making the best of a bad situation.

    • toony says:

      Chris is right, take the money and RUN!!!

      This part of the scam is quite insidious! ALL ‘initial units’ are theirs (in the fine print). They are left in your account for 2 good reasons:
      1. Inflate the value of the account so it looks like your investment is growing…until you go to take it out!
      2. Allows them to steal more of your money deceptively – all the various account fees are based on the inflated account value but ONLY deducted from NON ‘initial units’!!!

      One of the fine print says you can only pause payment for 1 or 2 years max – ie. can’t keep account dormant till contract ends.

      That GBP1,320 is another invisible ‘upfront’ fees (ie. similar to ‘initial units’) to keep your account open. The ongoing fees of the ‘initial units’ + GPB1,320 is GUARANTEED to deplete your GPB1,320 –> 0 in 1-2 years – which then triggers automatic closure of your account…unless you send them another GPB1,320 (this payment request is repeat every year or so until you give up and realise you got scammed AGAIN – the REAL value of your account (after max partial withdrawal) was actually ALWAYS 0!!!)

      As Chris suggest, don’t give them a single penny more…let alone GPB1,320!!!

      • Oz says:

        Hi Toony,
        I appreciate you bringing this to my attention. I’m looking into that fine print as that was not what I’ve been told by FP. They were very clear that I can stop premium payments with no penalty and that the early redemption fees reduce over time. With that in mind it makes sense to follow Andrew’s advice of withdrawing the maximum and moving the initial units into the 4 funds he recommends.

        However – this all changes if what you are saying is correct. I shall look into the fine print and post my findings.

        It is a big difference and certainly not a mistake I would want to make. Yes, giving them an additional 1,300 would be bad but throwing away 10 grand without being thorough would not be good either!

        • toony says:

          The fine print is worded very deceptively – even financial professional ppl struggle to work out the real impact from all the smoke and mirrors!
          You actually lost the 10K+ from day 1 – it’s actually the invisible, unfront/non-refundable fee imposed by the insurance company to open your account (and to reward the ‘insurance’ salesman for conning you in signing the dotted line) disguised as the ‘exit’ fee to fear you into staying longer and squeezing more money from you (eg GPB1320)…here’s another post of mine that explains the gist of these insurance scams many expats find themselves in – your question is answered in the ‘common questions’ number 1.


          • Oz says:

            Hi Toony,

            Thanks for sharing.

            I’ve now received a confirmation in writing from FP that “There is no obligation to continue to make contributions and the policy will only lapse if the value falls below USD2,000”.
            Currently there is GBP11K left in the wrapper after the maximum penalty free withdrawal. Over the 21 remaining years of the policy assuming that I move the funds within the wrapper to a global index tracker, even with the 6-7% headwind (which royally sucks I know!) it will still be worth more than double what GBP1,320 would be worth even making 7% more
            (I did the calculations assuming a 9% return for the GBP1,320 outside the wrapper and a 2% return for the 11K inside the wrapper after fees and after 21 years they are worth GBP7,397 and GBP16,345 respectively). After the 21 years I take the GBP 16K and put it in ETFs with the rest of my portfolio

            It is also very unlikely that the policy will drop below USD2,000 from it’s current GBP11K so I should not have to worry about the policy lapsing (85% drop is unlikely even with the hefty charges!)

            As such, I have to be logical and follow Andrew’s advice in this very article:
            1. Find out how much I can take out now. [Done]
            2. Invest that money in low cost index funds as per the advice in The Global Expatriate’s Guide To Investing. [Doing]
            3. With the money that remains with Friends Provident, build the lowest cost, most responsible (diversified) portfolio possible. [Done]

          • toony says:

            That’s great that you got something in writing!
            Your logic is sound and the calculations are spot on…if we are talking about a proper financial product in a regulated environment. However, we are dealing with an ‘insurance’ company/policy, in an unregulated environment AND with them holding your money hostage!!!
            What they wrote to you is not wrong…but it contains only half-truths with weasel clauses that you will only see after the fact!
            This part of the scam took me a long time to work out/realise – it’s Houdini level magic! Very hard to explain…but here goes!
            1. The ~11k in your account is made up of 10k initial units (already their money) and 1.3k belonging to you
            2. Lets assume 3% annual account fees (moved the funds to cheapest possible)
            3. I’m assuming your account value was ~50k before max withdrawal
            4. The fees are based on your account ‘expected value’ (ie. pre max withdrawal) and NOT current value (ie. ~11k) and deducted only from YOUR portion of the account! (please re-read this a few times!)
            4. At ~1.5k in annual fees (3% of 50k), it is GURANTEED to reduce the REAL value of your account to 0 within 1-2 years (which will results in your account declared ‘lapsed’ and shutdown, as warned by them!)
            5. For the account to remain open for the next 20 years (without additional money), your 1.3k investment (the market) needs to DOUBLE EACH and EVERY YEAR…to just stay afloat!
            6. Even if the impossible happened, you will cash out with only GBP1320 for 20 miracle years!
            7. With their ‘special’ accounting methods, the value of all ‘initial units’ magically –> 0 at end the of term (independent of market movement) or when you full surrender (trotted out as the ‘exit’ fee).
            There’s a small chance I may be wrong so happy for anyone to point out errors in my logic/calculations 🙂
            Oz, if you do leave the GBP1320 in the account, please keep in touch so we can learn more about these products and find out which of us is closer to the truth!

          • Oz says:

            Hi Toony,

            Very interesting points you make.

            The total value of my policy was about GBP32K. I have in writing that this particular policy charges a 6% annual fee on the value of the initial units. So throughout my premium paying days the lower fee rate was actually a slight of hand because the first 18 months premiums plus the “Bonus” have always been charged with a 6% fee and the lower advertised rate was for the allocation units. Actual, my FA was pretty good at explaining this when I signed on, I was just to dumb to put 2 and 2 together at the time.

            So my 11K will be hit by the 6% annual fee and the TER of the underlying funds (say another 1-2% depending on which funds I choose). So let’s call that a 7% headwind. Yep, not gonna make much money but shouldn’t get wiped out.

            I’ll double check on the value that the 6% fee is calculated on as I have it that it is initial units only and not the total value of the policy but I’ll get that in black and white.

            I’ll certainly stay in touch as things progress and let you know what happens over the years!

  49. Paddy says:

    Hi Andrew,
    I saw you in Abu Dhabi recently and it has got us thinking very hard. We were put into a Generali scheme for our employer contributions during a 4 year stint in Indonesia. The fund did badly and we will cash out ASAP at a $5k loss. It sucks but knowing we didn’t put our own money into it makes it a little more bearable.
    Where we’d appreciate some advice and reassurance is with an FPI Premiere Advance plan we bought into ourselves. Not having had the benefit of yours or anyone else’s good advice, it seemed like a good idea at the time. However, on paper, it doesn’t look like too bad of an idea now either. over 4 years $86k of contributions have made $99k of investments.
    While I am sure trackers would have beaten the pants off this and I also know that our profit is probably dwarfed by the fees De Vere and FPI have collected, I don’t count myself as part of the victim support group… yet.
    We have 16 years left to run and, with a big move coming up, we would like to potentially release capital to buy a house. I read your ‘making the best of a bad situation’ and I was wondering if you would still advise the same for a situation that has not yet gone bad but could?
    Our current thinking – as per your advice – is this. We will be making the switch as much as possible away from mirror funds and to the lowest fee most diversified plan possible. We will also withdraw our maximum, stop the premiums and leave the rest to run it’s course. Is there anything else you would suggest?

    • toony says:

      FPI Premier Advance contains a huge amount of smoke and mirrors to keep you in the dark as long as possible.
      What you need to do is request a ‘surrender value’…make sure you are sitting down before reading it! The 99k current value is not real…it contains the “invisible, non-refundable upfront fees” which will be dragged out as the “exit fees”. The 99k value also includes the fake *cough*…I mean bogus *cough*…I mean the creative accounting “bonus” units which are used to hide the enormous fees that’s depleting your money rapidly behind the scene!
      From the limited info you provided, I’m guessing ~2k per month contribution? I’m guessing your REAL account value (ie. surrender value) is between 53-58k only 🙁 So far, they have taken between 41-46k in fees right under your nose! With the market doing great in the past 4 years, a low cost diverse portfolio with 86k contribution should be >120k!
      There’s a talk in Dubai this weekend that is aimed at ppl in the exact same situation as you – I highly recommend it so you understand the situation better and ask questions:

  50. Paddy says:

    I actually attended one of your talks in Abu Dhabi a couple of weeks ago. It was an eye-opener. I do understand what you have been explaining and I get that this plan is not what it was cracked up to be. However, I can’t go back in time and was just hoping you could confirm that the advice you were initially offering still applies in our case (your surrender estimate is pretty accurate by the way).
    Should we suspend payments, make the maximum withdrawal, create a diversified, low fee portfolio and let it run its course as a paid-up fund?
    Thanks for your time and advice.

  51. JPExpat says:

    Looking at the posts I get the feeling there is a lot focus on how bad Friends Provident is for not returning our money and the high fees we need to pay

    Friends Provident are a nasty company that is for sure, I hope some day, someone brings these people to task for what they have done to people’s retirement savings..

    Lets not however forget the financial advisors who sold us this product. I can understand why there is not much focus on this, as such advisors are sometimes known/accepted among ones local expat community; they may play on the local rugby team, hang out in some of the exclusive expat clubs. When you call them up/talk with them, they seem friendly, will call you by your first name, they will etablish a relationship with you. They will always have an excuse on why your funds are not performing, they will suggest alternative funds, maybe other products. Make no mistake though, they are out to get your money and people like us mean absolutely nothing to them… they want to make as much money as possible off us and have absolute no concern for our financial future.

    Here is a link for a financial company in Japan that describes the behavior of such a financial advisor. He was selling the LM property management fund hosted by Friends Provident. He knew that the fund was in trouble; there was a waiting list of people trying to get their money out of this fund, but he kept selling the fund to new clients due to the high commision/bonuses he was receiving. Eventually the fund collapsed and investors lost all their money..

    This advisor kept his bonuses, and as he had heavily sold this product in Japan, so there were many people who had lost money here, he has since re-located to South East Asia where is continutes to do business…


    • toony says:

      FPI & Zurich are discussed constantly as they are the most commonly peddled product in the UAE (ie. they pay the highest commission, thus have the most egregious costs/fine print).
      It’s hard to name the individual insurance brokers for 2 main reasons:
      1. Most are ‘fly-by-night’ types, and
      2. Local laws about privacy is different to other countries – big restrictions on naming ppl.
      You also have to be careful naming companies too – they may abuse the privacy laws to cause you problems.
      Due to the high turnover and the nature of an expat’s life, I don’t see huge amount of infiltrating to sell – takes too long. The most common/profitable strategy I see sell as many as possible say in Dubai. When things get ‘hot’ move to Abu Dhabi or even Qatar/Oman etc. Another trick I have heard is rotating the adviser when customer starts asking questions/demanding answers to all the promises before signing!
      “I was clearly told there there was NO exit charges!”
      “I’m sorry but I was not there to witness what XXX told you. However, you did sign these agreeing to give us ALL your money!”
      The noose is getting tighter…

  52. Jihad Al Hajjar says:

    Hi Andrew, i discovered this late, so the first thing i did is i fired my financial adviser in Dubai (PIC/Devere) for misleading me, they sent me 6 different advisers in 4 years and every new one will recommend selling the previous investments (even with losses) and buy new ones with fake promises of growth. Currently i am stuck with big losses, invested approx USD 88000 since Apr 2011, while my current plan value is approx USD 39000 and now i am stuck with Friends Provident by myself and without financial adviser and i am thousands miles away (living in Canada) where Friends Provident don’t exist and don’t have any supporting offices, plus local Canadian advisers know nothing about such products and almost all of them deal with local Canadian/American companies. I am in real need for ur advice on what i should do, and if u can lead me to someone reliable who can run this show for me at lowest possible cost to try to recover losses (if possible). Big thanks in advance for looking into this.

    • Jihad,

      The best thing to do is liquidate that account. Now that you’re residing in Canada, you aren’t allowed to keep it anyway. It’s domiciled in a tax-free jurisdiction. But as a resident Canadian, you must pay tax on any non-tax deferred accounts. A tax-deferred account would be a TFSA or a RRSP.
      You will also, unfortunately, likely pay a redemption penalty when you sell. I explained how your investment scheme works in this book: https://www.amazon.com/Global-Expatriates-Guide-Investing-Millionaire/dp/1119020980
      Sadly, there’s little you can do to reclaim the money that you have lost with Friends Provident.


  53. SillyActuary says:


    Just wanted to thank you for this post and others like it. I had been talking to a “financial advisory” firm in Singapore that was trying to sell FPIL’s unit linked plan, and it was so well presented that I had been fooled – and I am an actuary, to my shame! Modelled it out afterwards and very much saw the smoke and mirrors that you all described here – hideous!

    You’ve saved me quite a bit of money and hassle, so I am very grateful! Following your advice to look at direct investing with TD International instead. 🙂

    • toony says:

      Well done on seeing through the smoke and mirrors – most financial experts fail to decipher/explain these products – incredibly deceptive!
      Singapore is a big target for these scammers – please inform as many people around you as possible!

  54. Alejandra says:

    Hi Andrew,
    Sadly I have also submitted to one of the FP products (Global Wealth Advance) for 10 years. We have been paying it for 6 months. With what I have read it might be better to stop it now even if that means we lose 100% of our money invested….. Right?

    Said that I’m a graphic designer and I wish this wouldn’t happen to anyone else, and I also would like that government or someone penalise this type of white collar scam.
    Yet that might take longer, but I offer you my skills in graphic design and motion graphics where we could create an output explaining how these companies work and why they are a scam, so we can make this video/infographic viral on social media so people can be aware of it.


    • This sounds like a great idea! How would we proceed?

    • toony says:

      Lucky you discovered the scam quite early – in most cases, people only find out beyond 18 months and discover the first 18 months of savings is completely taken up as hidden/upfront commission/fees.
      Think of it as saving yourself 12 months of payments 🙂
      I’m always keen to support people looking to push back against this monstrous scourge plaguing expats, with links/references on how these scams operate etc

      • Alejandra says:

        Hi Toony, thanks for your comment. But unfortunately, I will loose all of the money I have invested in the 7 months if I cancel the plan now.
        Which I find is very unfair…. to say the less.
        We are not sure what to do, if to continue but putting everything in a low risk profile, or just assume the lost now …

        • Chris says:


          As a previous FP victim myself, I can only endorse what Andrew and Toony have said previously. Although it is very painful and unfair, bite the bullet and get out completely now. You will not get back the payments you have made in the first 7 months anyway – they have already gone to pay the commission of whoever sold you the scheme. The next tactic they use, in order to persuade you not to leave, is to suggest lower risk funds, reduction of payments, or other methods aimed at alleviating your fears. You will only be throwing good money after bad.

          Getting out now will be painful, and you will feel angry and frustrated. If you follow the advice in Andrew’s excellent books however and put future funds into your own low-cost portfolio, you will come out ahead in a relatively short space of time and you will be far ahead over the longer term!



        • toony says:

          The 7 months of payment is sunk costs – it was all smoke and mirrors to pay the hidden commission/upfront fees (not a single cent was actually invested).
          You are fortunate to find out so early and have people warn you about the scam – others have lost way more. From where I stand, I see the following possible options for you:
          a) Walk away now with $0 and consider the 7 months of premium as your financial tuition fees, learn to invest properly and never fall for such a scam again, or
          b) Walk away in 18 months, losing 18 months of savings because you wanted to chase some imaginary money, learn to invest, etc, or
          c) Forced to walk away flat broke in 20+ years from now, having literally lost your entire life savings and forced to work till you die…all because you were chasing non-existant money!

          • AGW says:

            Thanks Toony and Chris for sharing your comments and experience.
            We have terminated de plan assuming the loss of the 7month premiums we have paid.
            And taking it as a learning.

            Even though I’m 100% sure I lost the money, I will report the situation to the Money Authority of Singapore, not with the intention of getting back the money but to at least bring one more case to the M.A.S…

            Has anybody sued this type of things? Because they are real scams they sell air…

  55. RSBM says:

    Four years in with FPI. I share the same shade of green and disgust at both the Brokers and myself. Not to be repetitive here but please share your two cents on my situation:

    Surrender value USD $57K, penalty USD $51K, ha
    Waiting to hear how much I could pull out now penalty free if any.
    Planning to reallocate all to P02, J11, R70 and stop paying any further premiums.
    That’ll give me two years from what I read before more fees, right?
    Thinking I’m going to lose $51K anyways….if I keep in it in there, that’ll cover fees and maybe I can increase my surrender value before completing pulling out? Or pull all out now?

    My generosity is going to be the end of me, first the credit card companies that I overcame and if that didn’t teach me enough, then this. What happened to older and wiser?! Guess I’m not old enough yet!

  56. JPExpat says:

    Just in case anyone is in any doubt about how much is deducted in fees by Friends Provident.
    I can view my Premier policy online, and after I login there is a “Transaction History” tab which shows the deduction for fees that they make each quarter.Last week I checked and calculated, that they are deducting about 6% annually from my policy value….I have surrendered the maximium value of the policy, I used the index funds that were made by Andrew for the remainder, and while my policy does grow in value, once the fees get deduected each quarter I basically lose those gains again…. If I try and get all my money out, they will charge me a cancellation penalty…so either way they win….

  57. Alex says:

    Just got this email from Charles Schwab.


    Seems quite reasonable compared to even Vanguard. Am I missing something here , or is it in fact a good alternative?

    • Mark Zoril says:

      Alex, these are very good choices. Schwab is trying to compete with Vanguard and others in the ultra low-cost ETF and index fund area. Unfortunately, for most followers of Andrew, they are not available! Schwab is only available on a limited basis to American expats and not really available, to my knowledge, to non Americans worldwide. If you are an American and have an account and then go overseas, you can keep the account and likely fund it. But it is unlikely Schwab will let you open up an account as an expat.

      • Alex says:

        Hi Mark
        Thanks. Well, this week , we closed our FP account. Took a 20K sterling hit and cashed out. Actually I am British Expat and have a Charles Schwab account. In Hong Kong they are more flexible it seems. Anyway , now we are cut free from FP , we will look for new investments. Charles Scwab obviously has the ability to invest in US stocks individually, but now also it seems to beat Vanguard in terms of operational costs. What with the US market about to reverse , potential interest rate hikes , perhaps now , despite the hit was as good a time as any to exit. I think we are just going to knuckle down and put money aside every month , maybe eat out less and just re-coup the FP disaster and realize it could have been worse in 15 years time. Good luck everyone else in exiting. If there is ever a chance to get any of the money back from FP please update me.

  58. JPExpat says:

    Hi Michael
    To be honest, I can offer no better advice than what has already been mentioned in this forum; surrrender the Max amount and leave the rest in the FP funds recommended by Andrew in this article, or just pay the penalty and take all your money out..

    For my case I went with the first option above even though I am still paying 6% fee, the reason I did this, is so that I can offset the surrender penalty against my tax at a later stage.

  59. Alberto says:

    Hi Andrew thank you very much for your expat guide. Read it in less than a wee, real eye opener.

    I have been looking to apply the concepts from the book in my Generali Vision but no index fund is available. Would you be able to do a a similar “make bets of a bad situation” type of recommendation for the Generali Vision platform?

    Really appreciate


  60. Jihad says:

    Guys remember that in FP you can’t stop premium contribution payment (take holiday) for more than one year or your policy will be automatically surrendered; however, you can reduce your premium contribution to the minimum allowed level which is $150.00 per month for the FP Premier Plans (the one i currently hold) but i am not sure about the other plans.

    • Oz says:

      It must depend on your policy then.
      I no longer pay premiums into mine and because i had paid in for over 4 years it is not surrendered.
      They call my policy “paid up” and I can now no longer make payments into it.

      • Jihad says:

        Be careful, paid up means your monthly/quarterly/annually charges/fees are eating ur capital investment slowly and hence u will not have anything left for u at the end of the policy term. u will be very lucky if whatever funds u invested in made a good profits to cover the expenses of the policy.

        • Oz says:

          Yes, it’s 6% per year on those initial units. So very unlikely to make any money. However the surrender penalty is designed to be pretty much the same: I put together a spreadsheet to calculate if it was worth surrendering and investing the money without the 6% headwind: my results were pretty much a wash.

  61. SGexpat says:

    Hi all,

    I am about SGD 30k into one of these plans and thinking of cancelling. It goes without saying really, but I assume anyone on here would recommend to cancel the plan now (12 / 18 months in) rather than see it through past the initial period?

    The fees are not transparent when you sign up – when else in your life would you be allowed to purchase something that didn’t tell you exactly how much you could be liable for, especially something that last 25 years? I know we all have a duty to ourselves to understand before we buy, but given the number of people in this situation, how can they be allowed to keep selling these products?

    I’d like to hear from anyone:
    – who has spoken to MAS about these schemes, and if they are doing anything to shut them down?
    – any guidance you have received on recovering your money
    – people who would like to club together to educate people in our situation BEFORE they invest their hard-earned savings in these plans

    If you are keen to help people in a similar situation (given you’re on this forum you probably are!), please message me.

    Cheers all, and good luck in your own situations, look forward to hearing from you.

  62. toony says:

    Have seen a few recent replies to this thread – feel like a broken record sometimes.
    Yes, these insurance policies masquerading as a financial product is scam – there’s a good reason why they are banned in developed countries…
    Once you realize about the trap, you need to get out of it ASAP! The more money you put into it and the longer you stay in them -> the more they can legally steal from you!
    It hurts to cancel in the ‘initial period’ as you lose 100% of your money (the hidden upfront fees). Imagine how much more you would lose if you didn’t cancel and kept going…
    Keep in mind that the insurance company need you to stay in the trap as long as possible to steal all your money. They want you to do ANYTHING but FULL SURRENDER, ie, they are hoping you will chase after the ‘initial units’, (masquerading as the ‘surrender fees’) which is ‘sunk costs’ from day 1! Anyone taking payment holiday or reducing payment or freezing contributions etc is playing right into their hands…the sneaky fine print makes sure of that!
    Your account value has NO effect with the ongoing fees…it’s all calculated based on your contract amount. This fee rises over time, based on the ‘expected’ contribution amount!
    Eg. 5% portfolio fees with $1000 contribution a month is 12k pa. Year 1, fees is $600 (deducted pro rata quarterly). Year 2, fees is now $1200pa (5% of 24k). Year 3, fees is $1800 (5% of 36k)…year 25, fees is a whopping 15k (bigger than your entire contributions!!!) if you are silly enough to keep going this long!
    If you reduced payments/holiday pause etc, it doesn’t take long for the ongoing fees to overwhelm your account, reducing it to $0 ie. they have successfully stolen 100% of your money and close your account.
    IMO, people are always better off to FULL surrender ASAP and salvage whatever they can, or wait long enough for the account to reach $0 and lose everything.

    • Oz says:

      Hi Toony,

      I have it in writing from FP that for my policy the % fee is on the balance of the policy not on “‘expected ‘ contribution” I assume there are some variation between these policies?

      • toony says:

        Happy to stand corrected if you have it in writing. I remember reading something along the line “…payment break/reduced payments/etc will see fees continue as per contract…” but can’t locate it now.
        I have a new recent ‘product guide’ which now states (with regards to premiums breaks/plan paid up) “Charges will continue to be taken from your plan…” which is no longer explicit if calculations are based on contract value or current value! There’s reference to the ‘policy conditions’ document for a full explanation, which I don’t have. They really like to make things ambiguous and bounce you around various documents to hide the fees!
        Have you seen this link?
        All initial units are ‘sunk costs’ (hidden upfront fees) which they legally own from day one but pretend it’s yours (and go through the motion of taking 1.5% per quarter). The only thing that’s yours is the ‘accumulation’ units which is where they bleed you with all the ongoing monthly/yearly/amc/sky is blue/etc fees from.
        I hate to see you lose another $1 to them!

      • toony says:

        It should be noted from the link I gave (2/3 down) about ‘stopping premium’, the Zurich Vista policy states “You should note that while premiums are not being paid, the same charges will apply as when you were paying premiums”, which suggest fees based on ‘expected’ value rather than current value (allows them to get around people taking maximum out and just leaving account dormant)
        Perhaps this is where my original confusion came from

  63. Chris says:

    As a former FP victim myself, I have to agree with Toony again. There is almost never any benefit in continuing with the policy. Payment vacations, reducing contributions, and so on, usually make matters worse – and the initial units are always lost. The most important factor to consider is the opportunity cost of staying with something that will continue to drain your pocket until the very end! Even if you take the big surrender hit, everything that you salvage and all future monies that you might have invested will be available to earn you considerably more in your own low-cost index plan.

    For me, it was a really bitter pill to swallow at the time, but I congratulate myself every time I look at how well I have done since then.


  64. hank says:

    Toony you are correct that the FPI plans are really bad investments but you have your facts wrong in how the fees work. I assume you are talking about the Premier investment plan. The largest fee is the “initial charge” which is a quarterly fee of 1.5% of the initial units (the first 18 months of contributions). The initial units are charged this fee every quarter until the end of the term. In fact, the more you invest after the initial unit period the lower your average fees. This fee is not avoidable, even if you surrender the plan. The fees that are avoidable by surrendering are the 1.2% fund administration charge and the hidden fees associated with the underperforming mirror funds (I estimate cost the investor 2-3% per annum). Will your account go to 0 as you claim, not likely. Is there a better place to invest than FPI, yes without question.

    • toony says:

      I see the FPI (and similar products) more than just a bad investment – there’s a good reason why they are banned in developed and regulated countries. Yes, I may have made a mistake with the ongoing fees calc so taking that part back. However, we do know that everything you ‘invest’ in the first 18months is ‘sunk cost’ to pay the hidden upfront fees (which is dragged out as the exit penalty to scare people into staying).
      The ongoing fees are closer to 3-5% (than your 2-3%). 1.2% admin + 0.75% mirror + xx% funds (up to 3.3% but ave ~2%) + $$/month etc + others eg. front load.
      Have heard of several account getting closed (1-2 years after ppl max withdrawl and stopping new payments). Yet to hear of any account surviving past 3 years even though market going great past 7 years. This suggest to me the 4% fees applies to whole account but only deducted from the accumulation units -> real account value going to 0 (even though the account still has 1000s in initial units left)

  65. JPExpat says:

    Here are a few points from this article that may be of interest:

    “2016 financial report that Friends Provident International is under strategic review. The insurer sees little growth in the unit, whose main clientele are British expatriates, analysts say. Aviva’s gross operating profit in Asia dropped 4% year over year in 2016, compared with a 12% increase in gross operating profit globally.”

    “Provident International provides life assurance and investment products to global expatriate and domestic affluent customers in Hong Kong, Singapore, United Arab Emirates and other selected markets”


  66. SGexpat says:

    Hi All,

    Appreciate the candid feedback – and yes I am determined to get out of mine.

    However I would like something positive to come out of this. These products should not be sold to people who do not have the expertise to challenge the fee structure before they take them out.

    Does anyone know what can be done about this to stop people in our situation falling for these despite best intentions?

    It seems to me that MAS should tighten up their regulations?


  67. Sam says:

    Hi Andrew, I am 5.5 years into a 10 year Generali Vision Plan which I started while I was in Dubai. I have paid up (stopped paying monthly contributions), taken what I could out without charges and the rest remains in there (13 months of contributions). Can you advise which funds I should choose in my portfolio for the money that remains? I read your article on Friends Provident, do I follow same strategy? How do I find low cost funds on the Generali platform. Your advice is appreciated. Many thanks, Sam

  68. SB says:

    Dear Andrew and others,
    Has anyone tried to get the money out of Alexander Beard’s International Schools Retirement Plan before the age of 55? I had to sign with them when working at the international school in Bangladesh. Wish I knew then what I know now 🙂 Any stories to share about them? Thanks!

  69. Christine says:


    Thank you very much for your efforts at spreading the word on these opaque, expensive, inflexible and ultimately ineffective products. I was so sad to read the many stories from others about how they had been convinced to part with hard earned savings. Thanks to finding your blog, hearing those stories and buying your book, I have avoided investing in this type of scheme despite aggressive selling from an ‘independent’ Financial Advisor in Singapore.

    I have now arranged for a DBS Vickers account and continue to re-read with interest yours and others recommended funds, asset allocation strategies and valuable advice about taking a long term view and not attempting to game the market.

    I wonder if I can ask a question to you and the group having done significant research on the UK and Australian tax websites. From these I understand that while tax resident in Singapore I will not be taxed on any gains made through dividends or portfolio growth. When I repatriate to the UK or move to Australia however (one of these is a likely option within the next 3 years) I will start to be taxed on future growth / dividends at the point at which I become tax resident in one or other of these countries. Can you confirm that this is the case? I see no way round this, and have no issue paying this tax – after all it will only exist if I have gains to show for my efforts and it is right I pay the taxes of the country I live in – but I want to ensure my understanding is correct.

    The reason for my question is that one of the ways in which the products mentioned above are marketed is with the promise that gains you make over the lifetime of the product, agnostic of your location, will be tax free or attract very small tax payments in jurisdictions like Australia and the UK (the advisor I met told me ‘after 10 years the whole amount will be tax free in Australia’). Debunking this myth, or at least explaining through your blog that the tax you will pay using a brokerage account is likely to be less than the fees charged would be a really helpful addition to building the case against these types of investment vehicles.

    Thanks again for your work on this.

    • toony says:

      Till recently, I had a lot of trouble debunking the ‘tax-free’ feature they like to throw at you! (tax is not my forte)
      Going to talk about the Aus scenario as don’t know about the UK well enough.
      Once you go back to Aus, tax is payable – 50% for capital gains tax and 30% on dividends (as oppose to 15% at source tax) with ‘franking credits’.
      Now, dividends in Aus is higher at ~4%. 15% of 4% is 0.6% drag on your portfolio due to tax. This is lowered through the franking credit (benefits scales with your marginal tax rate).
      Now these insurance scams has a massive hidden upfront fee (first 18 monthly payments) AND ongoing fees (3-5% ER). Combining both and people realistically face an OCF closer to 6% on their portfolio! Adding on inflation of 2-3%, you need a market growth ~10% each year to achieve any real growth. If people think I’m pulling these numbers out of thin air or analysis is wrong:
      Like Andrew, I have yet to see a SINGLE portfolio older than 7-8 years that have beaten inflation, despite the massive bull run!
      Once you remove all the smoke and mirrors, all the hidden fees, commission, charges etc have an effective tax rate of 100+% on your earnings! Imagine the ‘effective’ tax rate a bear situation!!! I think I prefer paying taxes then fees 😉

      ps. ask them for the specific ATO ruling case and/or gov reference that allows these products to be taxed exempted after 10+ years! I can’t find one. People who have gone on these adviser’s word have been burnt badly with a huge tax bill! Watch them squirm!

  70. MTT says:

    Hi Andrew, sounds like I am another fool here.

    I have been investing 1500 GBP into FP premier advance for about 3 years, the last time I looked it said 48k invested with a value of 56k. Its a 10 year scheme. I thought until recently this was a good return. what’s the next step

    from reading the above
    1. stop paying in
    2. take out what can be taken out penalty free
    3. see what the surrender value is
    4. is it worth leaving a minimum in until it matures?

    Look forward to hearing from you


    • MTT,

      Considering how much the markets have gained over the past 3 years, that’s a very poor return. The penalty to redeem will be high. But the opportunity cost of not doing so will be higher.


    • toony says:

      It’s good to find out now and not at the end of 10 years when the damage would be greater 🙂
      Definitely stop giving them another cent straight away and find out the ‘full surrender’ (ie. real value of your account). By good fortune they only snagged you for the 10 years plan so full surrender value not as bad as others – estimate 47-48k.
      As always, I recommend ‘full surrender’ asap to maximize amount you get back (partial surrender leaves some behind which will face very high fees and never grow). Take everything you can and learn how to DIY portfolio in Andrew’s book so you never get caught in these traps again

  71. Stefan says:

    THANKS for your post on this Andrew 🙂

    I’ve sunk 10k into an OMI Managed Savings Account which was sold to me on the basis that I can take money whenever I want. — I’d stated to the advisor that I was on a plan for buying a house 3 years down the line and they recommended the OMI product — The guy then went off to Australia and I now know that I was sold a 17 year plan that is only beneficial if I stay in for the full 17 years. — Granted that the recent statement from OMI as I come up to the first year , has shown that my product has gone up by 4 % even after commissions and account fees etc.
    — but reality is that from reading your site, I now know that until I pay 18 months contributions, that my policy in real terms is totally worthless.
    — was definitely mis-sold the product so that the guy could run off to Oz with his fat commission, so will now stop and take the 10k hit else its just more money down a drain and a 17 year investment vehicle is totally a product that I didn’t need when the guy knew that I wanted to cash out in 3

  72. Chuck says:

    Thanks for all of this information. This may be addressed somewhere in the thread, but I didn’t see it. As a US citizen, how would the surrender value be taxed, if at all, when it is deposited in a US bank? I paid taxes on all of the deposits through my regular income taxes. I don’t expect that they provide a 1099R to the IRS, nor should they, but I am worried about how a large deposit to a US account triggers something with the IRS. I have been filing the required TD-F-90-22 form with the IRS each year since 2007. Thanks.

    • Mark Zoril says:

      Hello Chuck. I don’t give tax advice, but here are some thoughts for you. First, did you end up making money on the whole investments or just losing money? If you are a US citizen and purchase something at a loss you would not have a tax liability. Second, if you did actually make some money on it, this would be the difference between the total amount withdrawn and the amount invested, you might have a taxable event. If you were an American and made money on a variable or fixed annuity, your proceeds would be treated as income. Third, just because you put a bunch of money in a bank account doesn’t mean you trigger a taxable event with the IRS. (Of course, the brokerage dept at the bank might get interested!) People receive inheritances all the time that are not necessarily taxable events. Finally, if you have any concern at all about this, you could contact a tax consultant with expertise on issue for US expats.


  73. Chuck says:

    Can the “loss” you mention include the hit I’m taking in surrender fees? That wipes out any capital gain for me. Thank you for your earlier reply.

    • Mark Zoril says:

      Hi Chuck. This is an area where a tax advisor might provide a specific answer for you. However, I don’t see how you have a gain in something when what you withdraw is less than what you put in!!! Regardless of whether or not your loss was due to a fee or performance, you haven’t made money. Make sense? But I don’t give tax advice.

  74. Fraussie says:

    Hi Andrew

    Thank you for this article and for your book which I have just bought. Sadly, I fell for the same bad investment as everyone here… I feel stupid – a quick google search before signing up could have saved me and my wife a lot of trouble.

    Playing the devil’s advocate, isn’t there a way to justify some of the charges imposed by FPI? I’m thinking for example that if I were to buying into the same funds available through FPI, I would have had to pay a 5% entry charge where FPI enables me to buy into those funds for free? It is true that they recover those fees through the quarterly charge on the initial units (1.5% per quarter in my case)…

    Also, I benefited from a “bonus offer” when I signed up – it is what they call an additional enhanced of initial units of 45% for a 15 year plan at SGD 3,000 monthly contributions. This “bonus” is protected as long as I maintain my SGD 3,000 contributions for 4 years. I’ve been doing so for 20 months now…

    Also, I know Singapore does not impose tax on capital gains but if I didn’t invest through FPI’s tax efficient scheme, wouldn’t I be taxed on some of the revenue generated by my investment (eg dividends)?

    Does this change anything to your analysis?

    • Hi Fraussie,

      You mentioned, in a previous comment, that you bought my book. Answers to all of your questions can be found within it. https://www.amazon.com/Global-Expatriates-Guide-Investing-Millionaire/dp/1119020980


    • toony says:

      The insurance companies AND brokers (masquerading as IFA) spend a huge amount of time & money to ensure ‘business as usual’ in peddling these banned products (in developed countries) to unsuspecting expats! Don’t beat yourself too much – these products are deviously constructed and have fooled many financial experts! You are only a fool if continue to stay and pay, even after learning about the trap.
      Andrew found out first hand some of their tactics when he toured the middle east recently trying to teach people financial basics and I have to be very careful with what I say!
      Unfortunately ‘googling’ doesn’t help – they employ teams of people to constantly flood google with certain ‘tags and copy/paste articles to ensure bad feedback about them is pushed to pages 10+ so never seen by the average searcher.
      I don’t see how you can benefit through FPI given Singapore has no CGT! Personal tax is 0-22% progressively. With dividends withholding tax of 15% at source, there’s literally ZERO tax benefits going with FPI (at best, you save 7% of ~2.5% = .175% on your dividends!) Saving ‘pennies’ while losing 10s of ‘pounds’ in fees!
      There’s no way anyone can really justify the fees/clauses FPI employ. The same funds (or equivalent) you buy through FPI can be bought directly without front load/commission. What’s more, financial powerhouse like Vanguard and iShares provide far superior funds/ETFs at 1/100th the price!
      The ‘bonus units’ are fake to trap you into signing! Quick summary – ‘initial’ units is THEIR money/your sunk costs. ‘Accumulation’ units is YOUR money. The ‘bonus’ units is part of the ‘initial’ units 🙁 They are baiting for you to stay for 4 years, chasing the mirage ‘bonus’ units…don’t fall for it! I have written a generic response here for many people in your situation:
      Andrew’s book is absolutely vital for expats and will help you avoid financial traps in the future. Good luck:)

  75. Fraussie says:

    Thank you to both of you. I have just finished reading your book Andrew and really enjoyed it.

    The sample ETF portfolios you suggested in your book are very helpful but they seem to be tailored for specific nationalities assuming people will retire in their home country or know where they will retire. I am a French and my wife is Japanese – we have no idea of where we will retire. I left France 13 years ago and lived quite a few countries. I am likely to keep travelling around the world. Would you be able to suggest a “global citizen” type of ETF portfolio please?

    I’m 38 but I started working late so I guess I’ll go for 25-35% in a bonds ETF.

    • Hi Fraussie,

      In the section for British investors I also recommended a portfolio for “Global Nomads” which would likely suit you well.


      • Fraussie says:

        Fantastic, thank you. Regarding the bonds ETF, you recommend iShares Global AAA-AA Govt Bond UCITS ETF (SAAA) but I note that it is not a short term bonds ETF. The average bond maturity is 9.6 years. In other parts of your book you recommend going for short term bonds ETFs. I’ve tried to look for an ETF meeting the following criteria (i) EU exposure (ii) AAA or AA ratings (iii) non-US domiciled but I couldn’t find anything. There’s IGBS but it mainly tracks bonds issued by the Italian and Spanish governments. No offence to my Spanish and Italian friends but I would prefer bonds issued by rock solid EU economies eg. Germany, Scandinavian countries etc..

        • Fraussie,

          When you arrive in the U.S., you could buy a short term or a broad bond market index through Vanguard. Or, even better, you could buy a Vanguard Target Retirement Fund.


  76. RS says:

    I invested 15000 GBP with FP IsleofMann back in November 2006, needed cash urgently, so surrendered in July 17 – after surrender penalties, I got about 26500GBP back, appears to be reasonably good returns, and after 10 years, the penalty burden was next to nothing. Are FriendsProvident really as bad as I’ve been reading up on the net?

    • Hi RS,

      You invested a one-time lump sum and you earned 76.6 percent in GBP by turning 15,000 GBP into 26,500 GBP after redemption fees. But your gains were posted in GBP, which gives you an optical illusion that you did better than you really did because the pound lost a lot of ground to most global currencies. Let me explain.

      Using portfoliovisualizer.com, I entered a $15,000 investment on November 2006. I understand that I’m talking about U.S. dollars, so please bear with me on this one. If that $15,000 were invested in a U.S. stock market index, it would have grown to $38,222 USD. If it were invested 55% in a U.S. stock index and 45% in an international stock index, the same $15,000 would have grown to $31,838 USD.

      By comparison, your FP returns look poor. But we’ve only just scratched the surface. Your returns were measured in GBP. I measured the growth in USD. From November 2006 to July 2017, the U.S. dollar gained 47 percent on the British pound. You can find historical currency rates here: http://fxtop.com/en/historical-exchange-rates.php?A=1&C1=USD&C2=GBP&DD1=01&MM1=11&YYYY1=2006&B=1&P=&I=1&DD2=10&MM2=08&YYYY2=2017&btnOK=Go%21

      In other words, if measured in British pounds, a low-cost investment in the U.S. stock market index would have turned your 15,000 GBP into 56,186 GBP. If you had invested 55% in a U.S. stock index and 45% in the international stock index, you would have turned 15,000 pounds into 46,801 GBP.

      After fees and redemption penalties, you turned 15,000 GBP into just 26,500 GBP.

      If your returns were measured in a currency that didn’t slide backward, it would not have shown a profit after inflation, your fees and your withdrawal penalties.


    • toony says:

      As Andrew mentioned, your lucky timing with GBP/USD currency gave the illusion of good gains. However, comparing your returns to the general market for the same period tells a very different story!
      The ‘saving plans’ uses a lot of smoke and mirrors and arithmetic slight of hand to magically make you money disappear.
      These insurance policies (‘saving plans’ are not investment but insurance product) contain many layers of unnecessary fees that is guaranteed to destroy your returns, eg monthly fees, management fees, mirror funds, etc.
      Adding to all the fees is the fact that most insurance brokers have no idea how to construct a proper portfolio – all leading to a portfolio cost of ~5% per year. This article gives you an idea what 5% fees really means!
      Putting your numbers into the equation (5%, 10.5 years) gives ~40% loss due to fees/portfolio construction. As Andrew already mentioned, a globally diverse portfolio would have been around 45k GBP (correcting for currency).
      A 40% loss of 45k GBP leaves ~27k GBP remaining, close to what you got back. It is fortunate that you got out after 10 years as the fees/losses would have increased exponentially to ~62% for 20 years and ~77% for 30 years.
      Nowadays, a globally diversify portfolio can be as cheap as 0.10%-0.15% so charging something 30-50x the normal price is a little excessive don’t you think? These things are hated because they are purposely designed to be opaque & complicated to hide the massive upfront commission, huge ongoing fees etc (hence banned in developed countries). Most people don’t realise the trap until too late and have lost up to 100% of their savings!

  77. Bob Jones says:

    Hi Andrew

    What are your thoughts. I have Premier Ultra for 25 years. I am about 9.5 years in. I’ve put in US$71k and my cash value is around US$91k. My surrender value is US$68k and have US$55k I can take out without penalty. I am putting in US$1.5k a month.

    I understand I have a payment holiday of up to 12 months for the entire term of the policy.

    My initial 18 month contributions is where I am stuck and where most of the high fees are.

    My options are:
    – Don’t touch (not a real option after reading your blog)
    – Pull out totally and take the initial hit
    – Just pull out the US$55k and keep putting in US$1,500 and every few months just pull that accumulation out penalty free

    I presume if I stay in in any form, I should move to the cheapest fund options (basically Vanguard S&P 500).

    • Charlie says:

      Hi Bob,

      I was in a similar situation to you. The cash value of 91k is a notional figure which exists on paper only. There is a temptation to withdraw the maximum allowable leaving in the original 18 months. However, this is the most expensive part of your investment where the company real cream it from you. I considered but used a depreciation calculator to work out was it worth leaving. The bottom line for me was to cut my losses and start fresh with some of Andrew’s recommendations. In that way you can actually start to make money for yourself rather than paying out in management fees.


      • Bob Jones says:

        Hi Charlie

        Thanks for that. How can you find out the “real” value of the investments, or is that just made up by FPI?

        Also, where can I find a depreciation calculator to work out whether its better to take everything out or just the accumulated units?

    • toony says:

      Unfortunately you have been caught in a well known financial trap.
      Have a look at some of my replies to this thread to get an understanding of the situation and also read my general guidance to people in similar situation to yourself here:
      As mentioned by Charlie already, you really need to cut your losses and get out of the trap asap – they are bleeding you dry and losses are increasing exponentially!
      The ‘real’ value of your account is the ‘surrender value’ ie. $68k USD. If you only take a partial surrender ($55k USD), you are effectively giving them an extra $13k USD.

      • Bob Jones says:

        Hi all

        Thanks for your help. I’m in the process of pulling out of my FPI and am looking at which ETF’s to invest in.

        These are my thoughts:

        Some parameters:
        – Avoiding US stocks to avoid estate duty
        – Sticking mainly to UK stocks which are Irish incorporated (still looking into possible UK IHT / domicile issues)
        – Sticking to non synthetic ETFs
        – Avoiding hedged ETFs
        – Going 80% equity and 20% bonds
        – Fees are in brackets
        – Weighting in square brackets

        Equity – US [55%]
        – Vanguard S&P 500 UCTIS (0.07)[ 40%]
        – SPDR S&P 400 US Mid (0.30) [15%]

        Equity – Global ex-US [25%]
        – Vanguard FTSE Developed All Cap ex US (0.20) [15%] – This is on the Toronto Stock Exchange
        – FTSE Emerging Market (0.25) [5%]
        – Hong Kong Tracker (0.10) [5%]

        Bonds [20%]
        – iShares $ Floating Rate Bond (0.10) [10%]
        – Vanguard Global Short Term Bond (0.15) [10%]

        Some thoughts:
        – I have got seven ETFs listed above, am I over engineering things and adding to fees, or could I just go for world stock ETF’s or cut down the number a bit further (and save on fees)
        – Is there really any need for HK Tracker?
        – On the bonds side the iShares ETF is very new and the AUM is quite small, bit its with iShares
        – I would be looking to trade this on either Saxo or IB, avoiding a UK broker like iii until I can figure out the IHT position
        – I did look at something like Vanguard LifeStratergy Index Funds, but that would only be via the UK

        Would be interested on any feedback you had on this portfolio choice. I am still to read Andrew’s second book (already read the first) and am waiting for the new edition to come out before buying!

        • Hi Bob,

          This looks pretty complicated. I recommend just a global stock index and global bond index…if you live in an emerging market and/or you don’t know where you want to retire. You could own the world with just two ETFs.


  78. Belinda says:

    Hi Andrew
    I’ve read many times recently that bonds are a poor investment if interest rates are likely to go up. Is this something you take into consideration when buying and rebalancing? Many thanks.

    • Hi Belinda,

      That’s why I don’t recommend individual bonds, but short-term bond market index funds. As rates rise, new bonds within the index earn a higher yield. And because the bonds within such an index are short-term, you never get caught with your pants down when interest rates rise.


  79. Johan says:

    Hi Andrew,

    I have a similar issue with FPI. Got a Premier advance policy with them and managed to go into payment holiday and took the maximum withdrawal amount. Now the holiday is about to come to an end but I don’t want to pay anything else. Anything you would recommend? Fortunately I only paid about 12k, so the loss won’t be as bad as others. Appreciate your comments.

    PS Loved your Global Expatriate’s Guide to Investing! Everything nicely explained!



  80. Chris says:

    Having been in the same situation myself, I can only concur with Andrew and say that the best thing to do is liquidate and make a clean start along the lines he suggests in his excellent books. It stings to take the penalty but you will be much better off in the long-term as all these FPI schemes simply drain your returns.


  81. Matt Stoutt says:

    Hi Andrew,
    So dissapointed with myself that I have $27,000 with FPI. I’m a 31 year old British teacher living in the UAE for the past seven years. Received poor advice when I was 24 as I wanted a good pension for an early retirement living abroad. The dream! Do you think I should surrender the amount and invest what I get in EDF’s? With the remaining in FPI should I allocate the funds into the ‘British sample’ you created with lower fees? Are there any others you’d recommend?

    Really appreciate any feedback,

    • toony says:

      Matt, it’s gut wrenching when you first realise you have been taken for a very expensive ride and your ‘friendly’ financial advisor was just a very convincing life insurance salesman.

      The great news is that you realised now and not another 10 years down the track, thus time to repair the damage. These products have been fined tuned over many decades. Literally ANYTHING you do apart from full surrender allows them to continue bleeding your account at the same until it’s dry (the very very fine print/clauses allows them to do this).

      My best advice is treat them like an abusive ex who’s cheated/hit you one last time. FULL surrender YESTERDAY, unfriend them on FB, block them on twitter and delete their number from your phone. Do not contact/go back, regardless how many times they tell you they love you and it was for your own good!

      Get Andrew’s book so you have an easy step by step guide (and never fall into one of these traps again) and since you are in the UAE, join this FB group for help and support:

    • Bob Jones says:

      Hi Matt

      I did exactly the same as you and can fully sympathise. I had invested around USD200k in FPI and an Old Mutual bond fund over the course of the last ten years. Last year I discovered this site and Andrew’s books. Since then I fully surrendered everything, took the hit on surrender charges and am now only on ETFs.

      As you are in the UAE and if you are not 100% sure on all of this, maybe have a look at AES (this site has an article on them). I did speak to them, but for various reasons decided not to use them. But they may work for you.

  82. Charles Hearsum says:

    Hi Matt,

    I was in your position just over a year ago. I cashed in all of my Friends Provident Investments and invested in ETFs using the British couch potato model from Andrew’s book. I wished that I had made that decision when I was 31.


  83. Fernando Poo says:

    Hi Andrew,

    My investment with FPI is for 35 years and I´ve been investing for about ten years now, how can I know where I stand on my investment?

    Thanks in advance.


    • toony says:

      Fernando, the only way to find out the REAL value of your account is ask your insurance broker or FPI directly for an ‘encashment or full surrender’ value – the balance on your account statement is fake.

      10 yrs into a 25 yrs still leave you time to recover if full surrender asap. Unfortunately you will be very lucky to get what you put in back due to all the fees bleeding your account dry. (most investors should have more than 2x money in past 10 years)

  84. Chris says:

    Hi Matt,

    As a fellow FPI “victim”, I can only endorse what others here have said – and the excellent advice in Andrew’s books. Toony is also something of an “FPI small-print expert” and the conclusion is almost always to bite the bullet and make a full surrender. I did this myself a few years ago. It totally sucked at the time, but it turned out to be the best financial decision I ever made. Some might advise stopping or reducing future premiums, taking “premium holidays”, or various other options short of a full surrender. Nine times out of ten, whatever you leave with FPI will be sucked dry. In the meantime, you are missing the opportunity to make a much better return with whatever you have left after surrender, using the kind of simple strategies that Andrew has highlighted. So don’t think about the penalties if you surrender, think of the opportunities you will miss if you don’t!



  85. Matt says:

    Thanks for the response Chris. Much appreciated

  86. Paul Mull says:

    Hi Andrew,

    I was an Expat in Singapore but returned to Australia in 2011; I have an FPI Flexi Growth Plan which I ceased input and withdrew what I could without penalty. I now remain with an approx. value of USD 35.3 or surrender value at USD 25.8K—
    I also have an OMI MPA account which again I ceased input and is now paid up—current value is USD 297 of which USD30K is a loan fund; with surrender at USD 244; both have maturity dates Jan 2027. I believe the FPI charges are higher then the OMI and will appreciate any advise you may have for both funds

    • toony says:

      It may be a better to full surrender asap, get what you can back and invest it properly as described by Andrew. These policies generally have clauses that allows them to extract the exorbitant fees based on the contract and not the actual account value. The 25.8k & 244k face the full charges of not missing a single payment and will continue to drop the longer you wait -> $0 if you leave it there long enough which is what they hope you do.

      Having a large amount of money stuck for another 9 years has a huge opportunity cost, further compounding your losses.
      If you invest it properly, there’s a good chance 244k + 25.8k comes close to double in 9-10 years. If you leave it there, there’s ~0% chance you would even get 250k back! (And you have lost another 9 years of compounding as well)

  87. Omar says:

    Thank you Andrew for the helpful article. I am 38 Lebanese expat living in Dubai. Back 2012 a friend of mine recommended a financial advisor as I wanted to start a monthly payment retirement plan.

    The Financial advisor turned out to be a skilled salesperson employed by AES International. I signed up for FPI Reserve for a US$ 100K and US$ 550 per month Premier. I saw my Reserve bond investment go to US$ 117K when the plan kick off. I was happy and topped it with another US$ 100K in 2013 exactly 1 year after my first deposit . My reserve bond went up to US$ 217K..

    Fast forward 6 years till today morning my reserve bond is at US$ 201K.. I made 1000 dollars ONLY! Although its worth mentioning that my investment dived dipping down to US$ 168K 2 years back and I am recovering since.

    On the other hand my Premier plan is at 37K , the premuim paid so far is US$ 34K.

    What makes me feel the pain is that I bought your first edition book but I never had the time to read into it, the other thing is that your blog was under my nose all the time.

    I had enough with the FPI platform and I have asked to surrender both investments the reserve and the premier. I will get back around US$ 190K from my Reserve bond after the surrender charges and 30K from my Premier one.

    I will open an account with SAXO bank. In addition being Lebanese , Lebanese bank are offering fixed terms deposit on the US$ with a rate of 6.5%. I always tried to avoid high risk countries but I have friends of mine who benefited from the compound interest on these fixed terms deposit while I am struggling to break even with FPI.

    Funny enough the financial advisor who signed me up left the profession to pursue a new career in hiring and recruitment. I switched from AES and moved to another local company and I was lucky to work with some good financially trained advisors.

    My question to everyone on the form am I doing the right decision ? or should I keep my money and invest in low interest funds as you recommended, since I have 3 years left to reduce completely my surrender charges ( around US$ 8K, as I signed for 8 years 1.25% per year) ?

    • Chris says:

      Omar – you are definitely making the right decision! Read through the posts above and the advice that Andrew gives in his books. It is very unlikely that you will gain any benefit from hanging on for another 3 years just to reduce surrender costs. Not only will you keep paying high fees and experiencing sub-par returns, you will also loose the opportunity cost of starting on a much better low-cost investment pathway earlier! I speak here as a fellow FPI victim. Surrendering the policies hurt at the time – but I was able to get ahead of the loss in less than 3 years.

    • Omar,

      It sounds like you are making the right decision. I’m surprised that they are penalizing you so little for selling early. It must not have been a 25 year scheme. That’s the good news. If you have a copy of my new book, Millionaire Expat, please read it thoroughly. You have plenty of time to financially excel. http://amzn.to/2CyIxqG

      • Omar says:

        Hi Andrew, thank you for replying. For Premier I do have the 25 years plan. I sent a fierce email to the gentlemen who put me into FPI, he replied questioning my negative feelings towards the platform .
        He said that what he actually did is added a 1% of annual AMC to allow me exit with low surrender value. He mentioned that he also did not claim the full commission charges .

        He mentioned that AES International is a regulated advisory in the UK which reviewed all contracts.

        I heard you speak positively about AES International. And now since you mentioned that my Surrender charges are small makes me understand why they might be better than other financial advisory firms in Dubai.

        This leaves me with another question to you if you dont mind answering. Regarding my lumpsum amount(200K) With my lower than usual exit charges does this mean that maybe I should wait a bit until the market is up to Surrender my policy at least probably to retain my capital investment or should I stay with my decision to leave ?

        Regarding your second edition book, I am looking forward to reading it I yet to decide either the kindle version or the book. The first edition I bought was on Kindle.

        I look forward to hear you speak on July 15th on DybaiEye radio


    • toony says:

      Omar, you are definitely doing the right thing by leaving asap now that you know about the trap.
      Surrender charges are fictitious, used to scare people into staying as long as possible. It is actually the hidden upfront commission and is sunk cost from day 1, regardless when you leave or if you stay the full length.
      Maths tells us for every $1 of the ‘surrender charges’ they reduce/refund, they will take ~$1.50 in ‘other’ charges from your account! In your case, staying for another 3 years will allow them to extract and extra ~$12k while giving you $8k back! Best way to minimise your losses from the situation – full surrender yesterday! (today is just as good)

  88. Melv says:

    Nice article but underestimated on how bad this fund actually is. I made the mistake of increasing my payments after 2 years and the initial fund term started again meaning I actually paid 3 years payments which I will never see again, something my final adviser or the small print failed to inform me on. It will end up resulting in me being charged a total 17.8% of my premium totals to cash in today. My suggestion is stay away.

  89. JK says:

    So we have also a FPI Premier Advance plan, arranged in October 2015 via Devere Acuma UAE, for 25 years and with $2k monthly contributions.

    Back then I understood that their bonus for the first 18 months ($58,500 value for $36,000 investment, so $22,500 bonus) is eventually going to be more than eaten up by the 6% cost on those initial units: $58,500 with 6% cost over 25 years results in $12,455. Nevertheless, I was thinking that this initial bonus may still pay off, given the initially higher leverage towards compound interests.

    Another assumption I had back then is that only 1.2% charges are there for any mirror fund, no initial charges or higher ongoing charges, irrespective of the actual underlying fund. Our advisor confirmed this also via email, stating that we get institutional rates within the policy which stops any other charges.

    Now I’ve read all those comments here, and I’m not so sure anymore.

    Although I’m also not sure how sustainable the $2,000 premium is over the long term, I’m still thinking that we should at least contribute further until the surrender values break even with our investment, so I guess to keep the policy at least for some more years…

    Can anyone clarify on the ongoing cost, whether they are really only 1.2% for accumulation units? Or are there additional cost for the underlying funds, possibly hidden into the bid prices?

  90. M says:

    Hi everyone,

    I have been scammed and locked into an Old Mutual International Managed Savings Account. Everything I asked for I didn’t get including the broker aware that i had no interest in investing other than mere saving. In hindsight i should have just shoved it into my bank account.

    I have laid a complaint with the brokers firm and to make life worse for them have laid a complaint against them with DFSA (in Dubai – where they are based) As what they are doing is extremely illegal and even if i lose my money (likely) I aim to get them and there various sister companies shut down. Then these sharks will be jobless. I also work in media, so a whole load of noise is going to come out of this with no-one investing through them until they are shutdown.

    Unfortunately they messed the wrong persons life up and left me penniless after 6 years hard work and long hours.

    • expat26 says:

      I too am a victim of the FPI premier plan. Back in 2012 I was sold this fund for a period of 22 years. I have invested 177k and the fund balance is 200k. If I was to cash in now I would lose more than 50k in penalties. This is a lot of money to lose!

      I was thinking of withdrawing 100k and opening a saxo or swissqoute account to invest in low cost index funds. I would change my funds to the ones talked about above and hope that I can lessen the bleed! Over time I can make up the loss with my index funds.

      Its very sad to see so many stories like this!


  91. expat26 says:

    I too am a victim of the FPL premier plan. I was sold this plan back in 2012 for a period of 22 years. Ive invested 177k with a value in the fund of 200k. I would stand to lose more than 50k if I was to cancel the plan now. This is a huge amount, if it was 10k or 20k it would be a no brainier for me but 50k is a bit different!

    Im thinking of withdrawing 100k and using this to start an saxo account with low cost index funds. Change my FPI funds to the ones talked about above and keep the monthly payment amount down. Then I can maybe come out ahead or breaking even and the index funds will make up for the rest.

    Its very sad to read so many stories like this!


  92. expat26 says:

    I too am a victim of the FPI premier plan. Back in 2012 I was sold this fund for a period of 22 years. I have invested 177k and the fund balance is 200k. If I was to cash in now I would lose more than 50k in penalties. This is a lot of money to lose!

    I was thinking of withdrawing 100k and opening a saxo or swissqoute account to invest in low cost index funds. I would change my funds to the ones talked about above and hope that I can lessen the bleed! Over time I can make up the loss with my index funds.

    Its very sad to see so many stories like this!


  93. Charles says:

    Expat 26,

    The fund balance is a notional figure which exists on paper only. My advice is to fully cut your losses and start anew. Holding out for an upturn in fortunes in FPI is unfortunately a fools dream. I can speak on experience on this matter.


    • Expat26 says:

      Thank you Charlie. I have already cashed in and surrendered my plan with FPI. I will invest all the cash into low costed index funds from the recommendations in Andrews book.

  94. JC says:

    Hi Andrew,

    Im from HK and not familiar with these funds. I have been contributing since July 2009 with this company and it’s almost 10 years now and lost 70k already. My terms is for 25 years. I have checked with my adviser if I have to cancel this account then I will lose another 30k. Please advise if I should keep this for 15 more years or should I just cancel it since it is not gaining anyway. Details of my fund is as below:
    BlackRock GF World Gold 15%
    BlackRock GF World Mining 10%
    First State China Growth 15%
    Investec GS Global Strategic Equity10%
    JPMorgan ASEAN15%
    JPMorgan Thailand10%
    PIMCO Global Real Return25%

    thank you for your advice.


    • JC,

      The salesperson built you a portfolio based on the funds that had recently done well. That’s a mistake. One decade’s winner often becomes the next loser. Instead, he should have diversified your assets. You will be slapped with a penalty for getting out early. But if you invest the proceeds as described in my book, Millionaire Expat, you will eventually come out ahead.


    • Bob Jones says:

      Hi JC, are you able to name details of your so called advisor here?

      I, like you, live in HK. I started with a so called advisor in 2008 for a 25 year term on one of these insurance linked products. I got out last year and took the USD20k (in my case) odd hit. In my case when I got out I was lucky that I didn’t lose any money, but did miss out on nearly 10 years of growth.

      • Alex Brown says:

        I am from HK too Bob Jones … same story .. it was Henley and now they call themselves St James … we took a huge hit , but still glad we exit the account. Would be glad if collectively we can get all that money back.

        • Bob Jones says:

          Hi Alex Brown. Snap! Like you it was Henley (and now called St James). Initially they sold me the FPI product and then the sold me a Skandia Executive Bond (changed name to Old Mutual).

  95. Chris says:

    I am also in HK. Can’t remember the name of the advisor or his company – as it was quite a long time ago (1990). They were mainly promoting FPI products and recommending very obscure fund choices – whatever was “flavour of the month” at that particular time! The advisor was later the defendant in a number of legal cases and his company was ultimately wound up.

    I didn’t wise up and surrender the plan until September 2012 – taking a fairly substantial hit in penalties. Shortly afterwards I began managing my own investments along the lines suggested by Andrew in his excellent books. I have no regrets about surrendering the FPI plan and it did not take long to get well ahead of where I would otherwise have been. (The FPI plan barely kept ahead of inflation over the 23 years that I held it!).

    To anyone considering whether to stay in such a plan or to take the penalties and get out, I will say get out!


  96. JC says:

    Hi Andrew, actually I know nothing on investing or investment. If I buy your books, it has instruction on it? Can I handle my own?

  97. Michael says:

    Hi Andrew,

    Is the Australian funds advice you give in the article still relative today? I am about to change my funds to your suggestions.

  98. Clueless31 says:

    Hi there,

    We don’t know much about investments and like others, got trapped into investing in a bogus scheme. For us it is the Devere RL360 (quantum) plan for 25 years and only in the third year now. Pulling out now makes us lose $25000. Devastating to say the least. After reading about the many different charges it has/commissions etc, we are wondering whether it will benefit us to continue the plan taking breaks and giving the minimum payment till the end? Everyone that finds out about the schemes pull out immediately and cut their losses but has anyone actually stayed till the end of their investment and gotten paid out? Just wondering if Devere will pretty much ‘lose’ our money before the 25 years are up?

  99. billy bunter says:

    I complained about Friends provident International excessive charges on their PREM7 scam, in my case in the region of 8% plus. The said that they ‘investigated’. That’s BS. I asked them many times to quantify their 8%+ charges . They have ignored that instead preferring to talk about surrender values which I have no issue with as I know early redemption means they keep most of my money.

    I believe I can make a criminal case against them for fraud. Anyone that wants an update on this can email me on billy_bunter@yahoo.com

    Many people are saying that the lying scamming government of Donald Trump are continually asking if anyone from FPI wants a job.

  100. Sdp269 says:

    Hello, I have an FPI account and I wish I read this before I opened it, I’m currently depositing 300USD per month I dropped it down to that from 500USD after my initial 18 months ended, I’m 2 and a half years deep into a 25 year plan. If I try take the money I’ll basically lose it all. Is there any advice you can offer me at all?

    • This is going to sound painful, but the best thing you can do is walk away now. If you maintain this scheme, you’ll only lose more money. The long term opportunity cost is huge. But you’re lucky. You have only been giving them money for 2.5 years. It’s a tough pill to swallow, but it’s important to do it.


  101. Andy says:

    Hi Andrew, Hi all!
    a familiar story here…
    FPI ‘Premier’ policy initiated in 2008 in HK, initial investment 550 GBP a month and then advised to up it after 18 mths to 1100 GBP, (also conveniently switching funds at the same time), anyway, long story short, still have policy although now for the past few years it is ‘paid up’ as I moved from HK to Germany in 2015.
    Just had the 2019 statement and now worth 29,363 GBP (with a surrender value stated of 14,858GBP, assume this is the 11th year calculation rate), in total since 2008 a total of 57,810GBP was paid in, and I took 33,927GBP over the time in HK, so on first impressions slightly beating inflation?
    The charges appear to be approx. 6USD/month on the Accumulation units (which only make up approx. 4,000GBP of the total value), with the highest charges of approx. 600USD/year for one of the funds (GAM Star Balanced, fund value 11,000 GBP), with 2 other funds making up the remaining majority.
    For the past 3/4 years, the value has more of less been the same, with the only apparent ‘upside’ being the FX rate alone with (e.g. 0.77 USD/GBP in 2017/8, now at approx 0.82 on last statement last month. The charges being taken appear very high and the initial units reduced, and I assume keep getting reduced. I am about to relocate to the UK, (so not sure firstly of any potential tax issues/declaration etc.).
    Obvious questions now, should I take the hit (and before I move to the UK) or is somehow reduce the monthly and quarterly charges on the policy, by moving into lowest fund charges possible, (I checked all have approx. 1.2% annual mgt fee) or will this even matter. I believe that the Accumulation units’ amounts can be taken free of any charges, but again this a relatively small amount or ride this out for the remaining 14 years!

    Kind regards

  102. harry wiltshire says:

    I am investing around $6000 in OMI and RL funds.
    The OMI is expiring in 2023 and RL in 2035
    My so called adviser , from whom i initially did not purchase these policies, suggested to take the maximum loan from these funds and invest them in low cost ETF’s from Nedbank. He advises to continue doing this in the future.

    Which of the 2 do you think is a better option.

    1. Continue making regular monthly premiums to the 2 funds and then make annual loan withdrawals to invest into low cost ETF’s in Nedbank ( I like VOO, ITA, IHI funds) , In this case i would still be paying full charges to RL and OMI .
    Within these platforms (RL and OMI) , would you recommend that i use the lowest cost Index funds , or use slightly higher charging funds with better returns ( better than AMC of the funds difference)

    2. Do you suggest that i continue with low cost Index funds into my Nedbank account ( topped up from RL and OMI as above) and at the same time reduce the contributions to the minimum into OMI and RL from USD6000 to USD 2000. I have now been able to open a Charles Schwab account and was thinking of transferring the difference monthly (USD4000) into that Schwab account.

    While you do recommend TD and Saxo and others, i would like your readers to know that they can contact Charles Schwab and also open a regular trading account with them ( Non US citizens)


  103. Darkeyes says:

    Invested with Friends Provident when I was in the middle east and put in US$255K in lump sum and in “monthly” payments – Decided to pull the plug after allot of researching and ended up losing $42K out of my initial investment. Half of me is angry and sad – the other side of me is happy i got out before it could be worse. At least I saved what i could. The question i have is that i have US citizenship also (dual national) and I was told by someone that Friends Provident should never have sold me mutual funds and bonds as an American. Wanted to see if this gives me any ability to go back and try to recoup some of the losses. It is sad to see how many people are going thru the same pain – I wish I had been wiser!

    • Insider says:

      They will not make this public voluntarily but there are instances of American citizens being fully reimbursed. Persist! If you seem like a credible threat, they could reimburse you fully depending on the date when the policy was first sold.

  104. Thomas says:

    I signed for FP 2011 in Shanghai, I moved out from China to Singapore 2014 When I moved , I changed the broker for my FP as I also wanted to ad another investment, but when my x pat contract expired I never did so, ( good call as it was Zurich) anyhow to change broker that turned out to be a bad move, the commission was already taken in China and the guy in Singapore did null,

    I tried to move it back to the broker in China, but they did not even reply. I guess they were happy I was gone as they already cashed in. Now I manage my fund myself.

    I guess the first 3 years of saving will be locked for the next decade or so, no big drama I will need money when I retire.

    At this point I choose to continue to pump in a smaller amount every month good or bad. On the positive side I was able to take out 20K Euro without to much hassle a few years back, so if I got this right everything I pay now are not “stuck” right?

    Got a bit anxious when I read all the comments above….

    • Hi Thomas,

      Unfortunately, such products charge fees based on the maximum amount within them. So…you took some money out. But you are being charged the same dollar sums each year, as if you didn’t make that withdrawal. That’s what makes these things so toxic. By now, you should have made A LOT of money, considering when you began. But because of the internal fees, that won’t be the case. It’s best to sell it all, take the financial hit, and invest in a portfolio of low cost ETFs. The maths work out better that way, in the long run.


    • Chris says:

      I have been through a very similar situation in Hong Kong and I’m afraid that most people here are going to give you the same advice – and that is to surrender the policy in full accepting any penalty that may result. Then set up a low-cost index based investment plan of the kind suggested by Andrew in his excellent books and don’t look back! The surrender penalty is tough to take and is often why people hang on year-after-year accumulating further losses through fees, charges and fund under-performance. Don’t be fooled or let advisors tell you there will be bonuses for staying in. If you do so, you will also be taking the opportunity cost of not doing something much better immediately. Whatever you do – do not pay in anything more! I took a heavy penalty when I surrendered my policy but was amazed how quickly I got back ahead of where I had been. During the time I had the FP policy, it averaged just under 4% p.a. after fees during a time when a basic S&P 500 index fund would have averaged over 7%.

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