Zurich Vista Policy Holder Asks If He Should Sell It All



One of my readers recently put a comment on my blog. 

He’s kicking himself. 

He bought a Zurich Vista investment policy.  He signed up for a 24-year duration. 


The amount that he deposits over the first 18 months will attract total fees (including fund expense ratio charges) of 9 percent per year. 

After the first 18 months, fees drop to about 4 percent thereafter.

Over the duration of the policy, fees would average about 4.5 percent per year.


At this point, he has a dilemma. 

He could close the policy (essentially selling everything).  If he did this he claims that he would not get a penny.  The firm would keep the money that he has deposited.  This would be his penalty for getting out early.

Or he could drop his annual contribution to its minimum $300 per month, or $3,600 per year.


Naturally, he doesn’t want to lose his first 18 months worth of deposits.  He doesn’t want to lose the $39,000 that he has put in. 

But as expatriate financial advising specialist, Tony Noto, once explained, “That money is gone no matter what.”


To see what he means, you could wade through the policy’s prospectus to see how the fees are charged. 

Of you could check out a detailed report offered by AES International.  

Let’s assume that the investor loses all that he invested (his penalty for pulling out of the policy early). Whether he cashes in his policy or sticks it out with the minimum annual investment, the initial $39,000 he invested is gone with the wind. 


Here’s how that works.

“Offshore pensions plans such as the Zurich Vista cost as much as 9% per year for the first 18 months, dropping to roughly 4% per year thereafter. This is in large part because a lot of the money you agree to save is paid in commission to the salesperson who convinces you to incept (start) the plan. In broad terms the market average for this type of plan is around 4.5% of the total amount you contract to save over the entire plan (whether you save it or not).”  – AES International


I’ve independently come up with the same fee assessment. But it’s nice to see that I’m not alone.


Here are two scenarios:

  1. The investor keeps his $39,000 with Zurich Vista.  He invests the minimum $3,600 per year, for 24 years.
  2. He decides not to bleed any more money. He cancels the policy he has with Zurich and loses his $39,000 investment. Instead he creates a portfolio of stock and bond market index funds that cost 0.15 percent per year and continues to invest $3,600 per year.


Sadly, scenario 2 would come out ahead. 


As Tony Noto says, “That [$39,000] is gone no matter what.”


Zurich Vista Policy vs. Low Cost Index Portfolio


Zurich Vista

Low Cost Indexed Platform

Assume global stock and bonds make 8%



Initial Amount Invested



Total Policy Annual Fees

4.5% per year

0.15% per year

Annual Return

3.5% per year (return minus fees)

7.85% per year (return minus fees)

Amount invested per year

$3,600 / year

$3,600 / year

Time Invested

24 Years

24 Years

Assumed End Portfolio Value




Taking such a huge, upfront financial hit is painful. 

Mathematically, he should do it.  But emotions are something else.

Image by Pixabay



andrew hallam

andrew hallam

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

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4 Responses

  1. toony says:

    Ah, Tony Noto, a very rare financial advisor in the expat field like yourself Andrew. He was one of the first to publicly document how evil these ILAS are while refusing to be seduced by the fast money at the expense of expats. Reading his work on this topic really helped me understanding the working of these scams!

    I must admit, the people that originally designed these Zurich/FPI/Old Mutual ILAS products are absolutely brilliant, bordering on genius! These products are incredibly efficient at stealing money under people’s noses, while appearing to be a genuine financial product but remaining very tough to exposed/debunked/explain, even by very experienced financial experts!

    To the original person that inspire this post – take consolidation that you found out about the scam now and NOT after 24 years and realise that they have stolen most of your entire life savings!!!

    Keen to add a few points to what Andrew has mentioned already.

    There are actually 2 parts to these financial scams:

    Part 1 – Initial scam
    Basically, EVERYTHING you “invest” in the first 18 months is the upfront/non-refundable fees that goes straight into their pockets (shared between Zurich (approx. 1/3), the insurance salesperson, masquerading as ‘Financial Advisor’ that conned you into signing (~1/3) and their company (~1/3)).

    This is disguised as ‘initial units’ and ‘bonus units’ (to mask the real value of them to your account – ie. $0), which is then falsely trotted out as the ‘surrender’ fee when you realise the scam and try to leave!

    Part 2 – Ongoing scam
    This is the more insidious part of the scam! All contributions beyond 18 months are subjected to a mountain of different fees, most of which are invisible to the average person as they are conveniently left out or lied about at signup. Some of these fees include: fund fees, mirror fees, front load fees, fund spread, monthly account fees, admin fees, sky is blue fees, etc

    Together, the fees add up to 4-6% of your account value per year! This is the real killer part of the scam that most people fail to understand/see. I (and many other people) consider anything over 2% pa is a scam! This Vanguard blog neatly explains the massive effects of fees:


    Assuming ave 5% fees per year over 24 years, Zurich will steal 69% of your entire portfolio. To put this into perspective, imagine you invest $2000 pm for 24 years. At 5% growth, the total amount at the end will be ~$1.21M. However, Zurich effectively keep ~$835k and leave you ~$375k! Seems fair and reasonable right? 🙁

    In summary, these financial scam operate by stealing 100% of everything you put in the first 18 months AND then 4-6% of your account balance each and every year, completely destroying your entire savings!

    What to do if already caught in these traps
    From a mathematical point of view, there is a fixed cost (first 18 months) with an ongoing percentage (4-6%), which gives us a positive exponential curve. In english, this equation/graph has no turning point which means there is no action you can take along the way to minimise your losses! Everyday you remain in the trap, your losses grows not linearly but increases exponentially!

    The only way to minimise your losses is get out of the trap ASAP!

    Common questions I hear
    1. What about withdrawing the max amount and freezing contributions?
    No, this doesn’t work and will results in you losing more money needlessly! If you max withdrawal and freeze (instead of full surrender) they will keep an additional 2 years worth of upfront fees from your payout. You can only freeze 2 years and if don’t add more money, your account effectively reaches $0 and they automatically closes it down. Wouldn’t you prefer to give them 2 extra years of fees or keep that money yourself?

    2. What about contributing the minimum monthly?
    No, bad idea on 4 fronts!
    A. The more money you add to your account, the more they can take with fees.
    B. Fees are charged based on highest monthly contribution, not your minimum contribution
    C. All new contributions are better off invested in low-cost index funds to recover your losses, and
    D. You will get monthly reminders of this financial mistake which is not a good for your mental health!

    I have yet to see anyone in ANY situation, circumstances or strategy that is better than an immediate, full surrender! The designers of these policies are extremely clever, leaving no avenue of escape or ways to minimise your losses! You must take the financial hit and get out ASAP!!! As alluded by Andrew at the very end, the use of the fictitious ‘surrender’ fee is an incredibly powerful psychological technique to keep people in the trap for as long as possible!

    I really hope anyone reading this is able to make use of the information, take the financial hit and quickly move on to the recovery part! 🙂

    P.S. There are ample of evidence from many people (experienced this personally) that the insurance companies collude with local insurance brokers (AKA ‘Independent Financial Advisors’) to trap and keep expat trap in these schemes while providing each other plausible deniability.

    Even with solid proof of fraud or mis-selling, both parties will laugh in contempt of ALL refund requests (apart from a couple of extremely rare cases) while hiding behind a foreign country (Isle of Man) and knowing the local financial laws are too weak to prosecute them! Any attempt to chase after losses will result in much greater costs than what is lost to them initially! My personal advice – accept this costly, but valuable financial lesson, warn other people and move on to better things asap!

    Best wishes all 🙂

  2. scd says:

    Zurich Vista Policy is a horrible savings policy or anything. Worst part is their is no exit clause that allow to surrender the policy with out paying extortionate encashment charges. I would not recommend Zurich for any saving or investment types of plans as it is a scam. Maybe for straight insurance where you can drive down price based on market competition but stay away from any investment type of vehicles.

  3. Shah says:

    Does the same concept apply with Zurich Futura policies? I know they’ve taken ‘total fees’ for 18-24 months. Not sure of the costs per year after that. That’s an insurance policy though in the case of death and other riders, so is it worth keeping?