It may seem very tempting.
Your offshore financial adviser explains that you don’t have to pay his fees, because the product providers and financial institutions will pay them for you. And what’s even better, as an independent adviser, he can compare the market and his company is large enough that they can secure you the very best deals.
Sounds great! Right?
Very, very wrong…
Here are the five reasons why expats should only be looking for a financial adviser that asks for explicit fees for their advice
1. YOU’RE TIRED OF ALWAYS BEING SOLD TO…
You may not need a financial product but you may need some financial planning advice. If your adviser only gets paid if and when you buy a product or an investment then you can guess where that conversation is going…
But with a fee-based adviser there is no conflict of interests.
Would’t you rather get unbiased advice that is in your best interest, not your adviser’s?
2. THE HIDDEN COST OF HIDDEN COSTS.
It is widely accepted that offshore products and solutions tend to be more expensive than their onshore counterparts.
Except that they’re not!
It’s only because your adviser is adding their own layers of fees and then passing them off as the “standard product charges” that you are suddenly faced with these very high costs.
And these costs will likely have a far greater impact on your financial outcomes than any subsequent asset allocation or investment decisions – this is the tyranny of small numbers over the long term, when the power of compounding works against you.
A fee-only adviser will be able to provide you with much cheaper alternatives as they are not adding any hidden charges to your costs. Whether it be a pension, an insurance policy or an investment, the money you save will be considerable.
3. WHO DO YOU TRUST – A SURGEON OR A SALESMAN?
Because fee-based advisers operate a completely transparent model, unlike most offshore advisers they actually have to demonstrate how they deliver value.
As such, they tend to be much more qualified individuals who have invested considerable time and effort to ensure that they really know what they’re talking about. As an expat you probably have quite complicated affairs, so you should only be looking to work with Chartered or Certified Financial Planners. These are the top-drawer professionals you can really trust.
4. IS YOUR ADVISER PUTTING YOU IN A STRAIGHT JACKET?
Most offshore financial advisers use financial products with complicated charging structures, which hide the adviser’s sales commission. These commissions are usually levied on your money for years and years,
whether or not the selling adviser continues providing any ‘advice’ or service.
A fee-only adviser will only use financial products that have simple and low charges and which don’t pay commission. It means there will be no hidden costs and no long-term constraints so you are free to change your investments whenever you want.
You pay for advice and service only as long as you choose to keep working with your adviser, and your money grows faster due to lower costs.
5. IT’S TIME TO SHINE SOME LIGHT ON CRAZY COMMISSION PAYMENTS.
Commission payments to UK financial advisers from financial products were ban in 2013 because they are deemed to compromise good advice.
Most offshore advisers continue to receive eye-wateringly high commissions which can mean that most of your investment returns go to your adviser, not you.
So don’t get ripped off or deceived. If you need professional financial advice engage a fee-only chartered or certified financial planner. It could end up saving you a small fortune.
WHY NOT ASK US FOR A SECOND OPINION ON YOUR CURRENT FINANCIAL SITUATION NOW? WHAT HAVE YOU GOT TO LOSE?