(UAE) Expat In Need Of Savings/Investment Advice

[dwstamps]

To give you some background - IAMA young male who has recently moved to the UAE, from a European country.
After deciding I need to set up some kind of savings plan I met with an Investment/Savings manager from P.I.C., who I believe are a part of the deVere group. Might be worth noting I have come across mixed reviews from this company.



My goal is very simple - I want to safely save money for 5-10 years with little or no risk, that I can access in years to come from my home country, without raising flags or running in to tax issues etc. I am not interested in receiving a % on my savings, however if this can achieved without additional risk then that's great. Peace of mind is the priority.



Now before I go further, let me say that I am limited in knowledge about investment products/plans, stocks/bonds/funds, ROTH IRA etc. And one of my main concerns with proceeding with one of the above products is due to the fact that I have heard that in the past, many people have had their retirement/pension plans wiped out due to market crashes (like 08/09) or something similar. I will admit ignorance on this part so open to advice.



The outcome of the meeting I had with the investment manager was as follows -
I will proceed to put 1/2 of the money I can afford to save each month in to what I've been told is a Zurich International product. It would be a 10 year plan, and the expected growth would be 5-8% on a medium risk level. The inital 18-month payments will not be accessible until the plan has ended. Payments after 18-months will always be accessible.

I've been advised to simply put the remaining 1/2 of the money I can afford to save in an off-shore bank account.



My question to you guys - Does the above sound like a safe plan to proceed with? Would it be susceptible to funds being wiped out if there was another 08/09 market crash etc? Should I bypass Financial Advisors and set up my own account and get in to some ETF's etc.?

Any advice/feedback would be greatly appreciated!
Thank you



UPDATE 21/04/2015 - a friend of ours has recently terminated their 10-year plan after 4 years of payments as they are moving country. They have paid a fee of over $8000 in order to leave the plan, and seem happy with this as they have 'made a lot more than this' from the plan overall. Ignorance is bliss!

 

[godisgood123]

@dwstamps What's the management fee here? Is the 5-8% gross or net? Where exactly is your money being invested? Do they have a holding period ?

I think you could get same results from an ETF on your own. Look em up on Morningstar.com

 

[dwstamps]

@godisgood123 Thanks for replying, appreciate it!


There was no discussion about a management fee. Our initial meeting was free, and it turns out he's basically getting paid or getting commission from Zurich to sell us this plan. There was no distinction made between the 5-8% being gross or net either. This is something I should have asked but I was already thinking about a lot of other things to question him about at the time.


The money would be invested in a Zurich International product (not sure of specific plan), and it would be located in the Channel Islands. Not 100% on the holding period term, but it would be a 10-year plan, with the inital 18-month payments not being accessible until the plan has finished.


After some digging, I came across this website from Andrew Whallam about expat investing. Very interesting altogether, and I've since cancelled my future meetings with the FA I was dealing with.


From what you're saying, and from what a lot of people seem to saying is to go it alone. Open up an account, choose an ETF and forget about the money I put in there. I have set up an account with ETX in the past, to trade some gold stocks, but I wouldn't say I'm overly familiar with ETF's etc.


Would it be relatively easy to invest in one? Difficult to choose a safe fund? etc.

Thanks

 

[godisgood123]

@dwstamps major red flags with this product being pitched to u. Try reading Andrew Hallam's book - Global guide to expat's portfolio. EAsy reading and makes sense.

When it comes to ETF, I'm close to signing up with OptionsXpress (They have ETFs). Reason is coz i'm looking for discount brokers with low fees on trades. You can setup for free and then start looking at products offered. Do you own independent research and come back to it when you're ready to invest.

 

[dwstamps]

@godisgood123 Got the book last night and making my way through it aws. Great book so far.


Cheers for the advice, I'll check out OptionsXpress/FirstTrade/Saxo etc. once I've done a bit more research =)


Actually just another quick question - my wife works with one or two others who are actually in the exact plan I described above, with the same FA (they referred us to him). I've a strong feeling they have no idea what they're investing in, nor do I think they understand the fees they're paying etc. They seem to be happy meeting this FA every few months, as he provides some 'nice graphs and charts' about their investment.


Do you think it'd be worth advising them to get out of the plan asap, do research on their plan and hidden fees etc. Or is it possible their plan might actually work out fine for them? Reason I'm asking is I'd hate to see someone we know get ruined with one of these 'investments'.

 

[godisgood123]

@dwstamps I think you should...but tactfully in a way that doesn't make 'em look stupid.

Come up with some pointers that you thought were deal breakers for you and that maybe they should check the same with 'dem FA

 

[dwstamps]

@godisgood123 Yeah I agree. I guess in our case, because we didn't proceed with the follow-up meeting, I'm not fully aware of the exact product he was pushing us on to (all I know is it was related to Zurich International), nor do I know about fees etc. So it might be difficult to give them specific pointers, and I don't want to come across as misinformed. Do you think the below sounds reasonable:

• I know that any respectable FA wouldn't and shouldn't be recommending a product for you, solely because they're getting commission out of it. A question to ask their FA would be why this exact product, why not an ETF or bonds or both?
• I've been advised to stay away from ILAS products, as they are commonly associated with hidden fees and are even illegal in some countries.
• It's a very unregulated market here in the UAE and there are countless stories of people losing large sums of money to these products and FA's.

Really appreciate your thoughts!

 

[godisgood123]

@dwstamps jah. fair nuff...just some points that should make 'em probe 'dem more...maybe point 'em to this thread