No upfront or establishment costs… But are you being charged more elsewhere??

No Upfront Fees – No Establishment Charges – 100% Allocation – No Ongoing Fees

Sounds great doesn’t it..?? but the obvious question that needs to be asked is if there are no fees or charges, how then are advisers, consultants, brokers getting paid. I can guarantee that they will not be doing all of this from the goodness of their hearts..!!


Unfortunately, I have seen the above being promoted to potential clients and it’s not until later down the track, the clients realise that maybe that was a little misleading. I must stress that I am not saying that this is the case for every adviser out there…. And in reality, you will find that it is the minority that may not be as ‘ethical’ with their disclosure.


I will start with the first 3 (no upfront fees, no establishment charges & the 100% allocation). In most cases when dealing with a Life Company with an offshore investment lump sum product, investors will have 100% of their initial investment, invested without anything being deducted. However, there will be an ongoing policy charge that gets deducted on a quarterly basis over a set period of time (5, 8 or 10 years).


However, the actual charge that gets deducted is determined by the amount of the initial investment but also the level of commission that the adviser is taking from the Life Company…….. the greater the level of commission, the higher the policy charge.


This can result in up to 1.9%pa x 5 years, 1.3%pa x 8 years or a 1.1% x 10 years being levied. Plus, you are then restricted in how much of your policy you can take back out and if you do decide to surrender prior to the 5, 8 or 10 year term, you will then be subject to an early surrender charge of the outstanding fees not yet charged.


When we have proposed a Life Policy structure for a client, we will disclose the level of commission that we will be receiving from the Life Company and how that will then be deducted from your policy. In most cases, this would result in no more than 1.1%pa x 5 years being charged and would be even lower for amounts above £250,000. Please use the contact button to see how we can potentially save on policy & product costs.


No Ongoing Fees – I have seen this mainly with so called professional investor / sophisticated investor type products such as Structured Notes. Technically, there are no ongoing fees as all of the charges, brokerage costs, commissions have already been factored into the ‘pricing’ of these complex Structured Notes.


At Ethical Offshore Investments, we will rebate a minimum 1% of the investment amount into a Structured Note back to the investor. This would be paid from the commission normally payable to Ethical Offshore Investments.


While I prefer to invest in the more transparent, liquid assets classes (managed funds, ETF’s, shares) I do acknowledge that there will be situations where a Structured Note can add value (diversification, reduction in volatility) to a client’s portfolio.


Please click here to get information on Structured Notes and what Notes are available for investment at this time.