Jump to content
Sign in to follow this  
M4Succubus

Offshore investment advice in Singapore

Recommended Posts

I've engaged one of those offshore investment firms. I need to get my money out of my bank account and earning something and they are recommending that I open an account with Zurich International Life and use that to invest in an AIM fund, which is a consensus managed fund.

Anybody have any comments on these guys and whether this is just a scam? Is there a better option? Anyone have any good/bad experiences?

Thanks.

Share this post


Link to post
Share on other sites

I wouldn't be too concerned about that. I took a couple of products out with the same company about a year ago and the returns so far have far exceeded what I would have got in the bank. What made me go with these was that they actually listen to what my situation was as recommended products accordingly. I was originally going to go with my bank (HSBC) but they gave me bad advice and only recommended the product which gave their guy the highest commission.

And of course your money will be with Zurich which are a big company.

Share this post


Link to post
Share on other sites

Let me declare an interest at the outset: I am an independent financial adviser based here in Singapore.

I'm not associated with this company but it won't be a scam.

People are often surprised by the potential returns available from offshore products and services largely because they have become accustomed to the dire returns offered by their bank or the lack of choice and sophistication of onshore products and services.

As a rule of thumb, if you don't understand what you are investing in ask some more questions until you do understand. If you still don't understand or are not entirely comfortable look at alternatives.

There are a number of options you can look at but I would not presume to offer any suggestions simply because I have no knowledge of your personal situation. If you would like to have a chat, feel free to contact me.

The whole industry is predicated on reward by commission and with the exception of a few products it's a fairly even playing field in terms of commission. The adviser who recommends on the basis of his own self-interest will enjoy a very short career.

Share this post


Link to post
Share on other sites

I think you are right in what you say. Everyones situation is different and I wanted an advisor who showed that they understood my particular situation. I think a lot of people just consider that these types of offshore investments are either too complicated, for a few very highly paid individuals or else they are dodgy and not to be touched. I am only a mere engineer but after a lot of research this seemed to be the way for me to go in the medium term.
 

Share this post


Link to post
Share on other sites

I have to say that I learned from bitter experience to be wary of "managed funds". I mean, it gives quite a cosy feeling, the idea that you have expert fund managers working on your behalf somewhere to invest your money for you. But you may need to consider that there are limits to what they do. For example, if you buy into an equities fund, then your money will be pretty much fully invested in shares. The fund manager will just adjust the composition of those shares from time to time. But if the stock markets as a whole are in a downward cycle, you're still going to be fully invested in shares. If you're lucky, the fund manager might shift you into shares which are falling less quickly than others.

I say this because I moronically invested quite a bit in managed funds at the top of the market. I just assumed that since the fund managers were smart guys with phone-number salaries, they'd know enough to get out of stocks when they started falling. So it came as quite a shock to find that I was fully invested in equities all through the market collapsed. I reckon I'll probably be retired by the time my funds get back to the price I bought them at.

The other thing to remember is that financial advisors generally only advise you to buy investments that they can sell to you. They wouldn't, for example, tell you to buy a house or gold or commodities, even though these have performed far better than equities in recent years.
 

Share this post


Link to post
Share on other sites

I agree with a lot of what you say. I really don't like managed funds but that is mainly because of the charges. As returns are relatively lower these days then an extra 1 or 2% on top for the "managed" part can really eat into any profits over time. I read somewhere that simple index trackers beat around 80% of managed funds. After all someone has to pay for those phone number salaries you mention.

With regards to your last point about interest rates and property bubbles etc I tend to look at it the other way. If people are gloomy about equities then the prices are likely to be comparatively cheap now. Look how many people went into the market at the end of the 90's when prices by most counts were expensive.

Sorry to hear about your losses anyway. I've learnt some similar things the hard way too.

Share this post


Link to post
Share on other sites

Investing, as opposed to speculating is very simple indeed: you have to be in for the long term and you have to be diversified. This will iron out the peaks and troughs and spread the risk. Falling markets in the short term look scary but in a medium to long term context they are no more than blips.

There are excellent reasons for being in equities and although property and commodities like gold can look attractive periodically, you can still lose out without a proper investment strategy.

As one who lived through the UK property boom and subsequent bust of the late 1980's and early 1990's I can only reflect that people have very short memories. By all means invest in property but be in equities as well - diversity is key and forget doing anything that relies on, anticipates or requires a short term gain or return - it 'aint going to happen.

Share this post


Link to post
Share on other sites

I have read the replies above with interest and this being a Forum, I wanted to impart a little of my wisdom to share with both the financial professionals on this page and also others that visit in order to gain further knowledge.

There are many Offshore Bonds offered by Offshore Life Insurance Companies and in all honesty, they are all much-of-a-muchness, similar products underneath with different wrappings.

Life Companies cannot offer 'charge-free' bonds because of costs to buy into most Funds - even though it is correct, Life Companies get heavily discounted Fund entry fees, these fees are charged externally to the actual Bond charges.

There is not an Offshore Bond on the market today that allows for no bid/offer spread, no annual management charge and no exit charges together - because once again, where would the Life Companies make their money and still be able to pay IFA's Commission who recommend their products, they couldn't!

You will almost always now in Bonds have no bid/offer spread, annual management charges are similar and exit charges will only apply in the main, to a proportion of your investment if you have to encash it within a given period - usually 5, 8 or 10 years: these figures will differ from product to product.

Bonds should not be viewed as a short-term vehicle which can be used as a trading platform but rather as a longer-term wrapper to encompass different aspects of an overall portfolio (in the main funds) but can also include stocks/shares, unit trusts and other assets.

Zurich and their products have been around years and you will get people who like them, and people who do not. There will be an equal number I am guessing who have made money and an equal number who have not. This usually has nothing whatsoever to do with an annual management charge of 0.8%, 1.2%, 2.5% or 3% - nor does it have much to do with External Fund charges. It has, in the main, everything to do with the Financial Advisor who recommended the product to you in the first place and how "hands-on" that person is in managing your portfolio.

Some Advisors will tell you at the outset that they are not Fund Guru's and will not be managing that portfolio for you. Some Advisors will recommend as form of Discretionary Fund Management (as mentioned) and some Advisors will tell you they are Warren Buffet in disguise and pretend that they will manage your portfolio on a daily basis. Whichever category your Advisor falls into is more than likely to have a very high impact on whether your portfolio makes money or not - as opposed to a percentage-point difference in Annual Management Charges or external Fund charges.

I will close by saying that there are huge benefits to expatriates in using the offshore Life Companies' vehicles, not least being that Life Insurance linked products do not come under the new European Union Directives for disclosure and taxation. Zurich's bonds are fine, as are almost all other Life Insurance Bonds being touted in and around Singapore - and the rest of the world.

If you want to make a sound investment decision from the outset, forget studying the bonds, the funds and the products first, leave that to second. First, we always suggest that people conduct due diligence on the Independent Financial Advisor that is offering their advice and the products. Ask them how long they have been in Singapore as an Advisor, and how long the company has been here itself. Ask to see the licence of that company and when translated, check that they are licensed to conduct Financial Services Business here in Singapore.

Ask for 3 references from satisfied clients here in Singapore, of your own nationality - and check those references out because any legitimate Financial Advisor here would not object to that and would fully understand your reasons for asking.

And finally, before you sign on any dotted line with any Financial Company - not just here in Singapore but throughout your time as an expatriate and even when you return home - remember that if anything sounds "too good to be true", that is usually because it is either a scam or you are not being explained the product and charges correctly.

There are many good companies in the IFA world and there are an equal number of great products with companies like, and including, Zurich International. These will never let you down on their own. It is the initial advice, explanation of the charging structure and the ongoing servicing of that advice that is of paramount importance and this will be the determining factor that makes/breaks your investment. If you understand what you have, are happy with the goals for your bond and above all understand how that bond will achieve your target goals and have a structure mapped out by your Advisor to do this, then this is the key.

It is such a shame that so many people get 'sold' an investment and then never see or hear from their Advisors again.
 

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  

×
×
  • Create New...