GWC
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Post by GWC on Jun 23, 2019 12:48:28 GMT 7
For many years I have been keeping various IFA in Thailand with a steady source of income, they in the meantime have been taking care of themselves and done nothing for me - seems to be familiar story! Now I am retired be nice to think I could take care of my own investments and derive an income, but I have so little knowledge so doubt that is feasible. At this time my "investments are split between FP & Investors trust, can I "sack" my IFA and manage these myself, as they are doing nothing apart from scooping up fees or is there a better investment to derive an income. Any advice replies appreciated.
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AyG
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Post by AyG on Jun 23, 2019 16:12:37 GMT 7
When you write "FP & Investors trust" you're going to need to be more specific. Is FP "Friends Provident"? And if so, what are the specific investments with Friends Provident and Investors Trust?
The quickest way forward would be for you to post scans for your latest statements from the two companies, blocking out your personal details.
As for sacking your IFA, you don't have an IFA - that's a British concept. What you have is almost certainly a Thai blood-sucking leech posing as a financial adviser.
And yes, you can manage your own investments. It's something that can be done with various levels of sophistication, but even the most basic will probably perform better than what you have at the moment.
And finally, am I right in thinking you're a British national, resident in Thailand?
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chiangmai
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Post by chiangmai on Jun 23, 2019 23:20:38 GMT 7
Unless you have a natural skill for investing and you are prepared to study up on what is a very complicated subject, I think your best bet is to try and get a UK based IFA (assuming you are a Brit.) to do the job for you, it's worth the 3% you will have to pay, without question you should try and disengage from the Thai advisor who is not regulated the same way here as IFA's are in Blighty. There are a number of threads on the subject of inexperienced investors beginning to manage their own investments, mine is probably one of the latest. Try reading the various threads in the Mango Money section, there's loads of excellent knowledge to be tapped there but be warned, it's not simple by any means. FWIW I started in a similar position to you about 18 months ago and it's taken me until only recently to feel as though I have a vague idea about what I'm doing. Good luck. Here's a starting point for you: bigmango.boards.net/thread/10888/pension-portfoliosbigmango.boards.net/thread/14784/evaluate-portfolio
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GWC
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Post by GWC on Jun 24, 2019 0:07:11 GMT 7
^^ Yes, it is Friends Provident, yes I have come to the realisation that my IFA is a "blood sucking leech", yes I am British but have no interests there, left there in 1978, my funds are in USD.
^ If I have any natural skills they are well hidden, this is what worries me, that I would make a worse job than the "blood sucking leech" my attention span is not what it once was! To disengage from "IFA" do I just have to inform the "company" of my wishes?
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chiangmai
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Post by chiangmai on Jun 24, 2019 0:51:03 GMT 7
It's difficult to comment without knowing whether or not you've signed a contract or what you've agreed to buy etc. but I'm sure others more knowledgeable than me will comment.
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AyG
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Post by AyG on Jun 24, 2019 8:19:56 GMT 7
Both Friends Provident International and Investors Trust are insurance companies selling similar products. They allow you to invest in a product which also contains a small element of insurance. Such products are unnecessarily complex and unreasonably expensive.
You haven't mentioned which products you have, but looking at a couple of examples, one from each company:
FPI's “Summit” product has an “establishment” charge of 8% taken over the first five years of the policy. There's also an annual “administration” charge of 1.2%. Then there are the management charges of the underlying funds, which are probably in the region of 1.5%-2.5%. So, in the first five years FPI and the fund managers will have taken around 24% of your money, which is outrageous.
Investors Trust “Platinum” product has the equivalent of an “establishment” charge of 8%, also taken over the first five years. The equivalent of the “administration” charge is 1.5%/year, so is even more expensive than the FPI product.
The good news with both products is that if you've held them for five years you can cash them in without further charges. (And even if you haven't, it may well make sense to pay the exit charges to get out of their clutches.)
Do remember, these are just examples. Your specific products may be more or less expensive, and may have more onerous exit conditions. You'll need to read the documentation.
Just to put this into context, you could invest through a broker such as Internaxx and pay $205/year to the broker, and perhaps 0.3%/year to the fund manager(s). This is a lot less than you're paying in fees at the moment.
Let's do a worked example. Assuming you invest $100,000 with FPI, in the first five years you'll pay $24,000 in fees. With Internaxx you'd pay $2,525. That's a massive difference.
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AyG
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Post by AyG on Jun 24, 2019 8:20:43 GMT 7
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AyG
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Post by AyG on Jun 24, 2019 8:21:25 GMT 7
So, finally, what to do? My suggestions: (1) Open a brokerage account with Internaxx in Luxembourg. It's a straightforward process, but does require you to mail them proof of address and identity. The website is www.internaxx.com/(Internaxx is not the cheapest broker, but their service is generally good, and their trading application is very simply to use. Brokers such as Saxo and Interactive Brokers have horrendously complicated trading applications.) (2) Check on the charges for closing your existing accounts. If they are actually as high as I suspect, then go ahead and close them, then transfer your money to Internaxx. (3) Try and work out what your objectives are for your investments. Are you looking for income? Would you be scared if the value of your investments fell, say, 20%? When will you need the money from your investments? You might find it helpful to read through a client profile form such as the one at www.citibank.com.hk/english/investment/pdf/IRPQ_ICPQ_Eng.pdf or at www.ketrade.com.sg/page/site/public/pdf/Cip-ind.pdf(4) Share your objectives here and ask for advice on simple investment solutions based around funds which can be bought through Internaxx.
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AyG
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Post by AyG on Jun 24, 2019 9:50:48 GMT 7
Assuming you invest $100,000 with FPI, in the first five years you'll pay $24,000 in fees. With Internaxx you'd pay $2,525. That's a massive difference. Slight error in my Internaxx calculation. It should be $2642. Still a massive difference, though.
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chiangmai
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Post by chiangmai on Jun 24, 2019 11:30:55 GMT 7
Getting your funds out of FP and away from the Thai broker would seem to be the priority, if you do those two things you will have stopped the rot and can always stick the money into a bank savings bond whilst you figure out the next steps. Why not go meet with the broker and tell him you're considering going back to the UK and you want to know what's involved in cashing in, that way you'll understand what the costs are.
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Post by Fletchsmile on Jun 24, 2019 12:58:38 GMT 7
Welcome GWC I generally prefer not to use IFAs, and believe in educating myself so that I'm the best placed person to manage my money to best suit my needs. I have used IFAs occasionally in the past. Generally the results are disappointing to say the least. (One exception I had with a positive experience was a UK IFA I used for a pension transfer where UK law requires you to use an IFA even though I didn't want one and feel qualified to do it myself. The UK IFA in this case provided no investment advice as I didn't want that, but did an excellent job on the pension transfer) To answer your original questions: - Yes, you can sack your IFA. I did this with a policy that sounded similar to yours with Scottish Provident. I wrote to Scottish Provident to express my total dissatisfaction with the IFA and their company, and asked if I could remove them from my policy. Scottish Providents reply was basically they accept no responsibility for anything and all the issues are down to the IFA. But that I could remove the IFA. So I did, and started managing it myself. Unfortunately removing the IFA doesn't solve the key issue with these types of policies, which is often the fee structure and charges. The fees and charges remain the same, with or without the IFA. These provide a large drag on any returns. - Yes you can then manage the investments yourself. But again this doesn't address the fee structure which is likely crippling returns. Average mediocre returns are maybe OK with low charges, but average mediocre returns with high charges often benefit only the IFA and the policy provider, as you're finding On the plus side, at least you've identified some of the issues. Sounds very much like the IFA needs to go. So to move forward, your main choices are: 1) retain the policy and find a new advisor. Likely a waste of time: A) find a decent advisor from Thailand B) the problem of the policy itself 2) retain the policy and manage it yourself until it matures. At least you will be in control. The problem of the policy itself and high fees still remains. These won't decrease if you remove the advisor.
3) terminate the policy, suffer any penalty, and cash it in for whatever it's currently worth less the early cancellation penalty. Take it on the chin and learn from it. It was a mistake. We all make them. Move on. It's likely you could invest the money elsewhere in similar products with much lower fee structures and more flexibility. You may have to suffer a penalty to access it before maturity. People often don't like the idea of a penalty and prefer to "hang in there to avoid a penalty" and "at least get something". Often this is a mistake unless very close to maturity. To make this decision you need to look at how much you might have at maturity after all fees etc and how much you might have if you did something else.
Very often terminating the policy and taking the penalty may be a better option
To terminate you could try doing thru your IFA and just say you want the money. IFAs can drag their feet though at such times, so you may be better going direct to FP. Say you are totally unhappy with your IFA, don't want to deal thru them and want to terminate the policy.
Often cutting your losses and moving on is best. Not to mention emotionally drawing a line under it, rather than being reminded every time you think about investments. If you post more info we could probably make more suggestions and help you thru it. Also read the thread below. There are a lot of similarities to your case. The thread wanders a bit as we often end up straying into other areas, but there's quite a bit of relevance to you, that could help bigmango.boards.net/thread/15118/total-return-past-10-yearsCheers Fletch
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GWC
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Post by GWC on Jun 24, 2019 13:30:11 GMT 7
Welcome GWC I generally prefer not to use IFAs, and believe in educating myself so that I'm the best placed person to manage my money to best suit my needs. Thanks for the reply and the welcome I should have taken the time years back to educate myself, but for "reasons" (or excuses) I never did! The funds I have with Friends Provident ~400k USD are not touchable for now, expect to be available some time this year as fund was "suspended" Funds with Investors trust ~ 600k USD I can withdraw, I was told that the fees they charged were one time and the lowest available, after two years there were no further charges which were 4%, was I lied too, how would I go about finding out? Funds are a mix of offering from Guinness, Marlboro & "world investment opportunities", if that makes sense. I have read through your linked thread, believe I can identify the "IFA" they are the ones who got me into FP, the IT came after I got fed up of their deceit! I believe I have cashed out three times now - at a loss every-time, as advised by different "IFA" & their promises, yes I was far too trusting! Doing the same thing again without a definite plan and a clear vision - I remain sceptical.
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Post by Fletchsmile on Jun 24, 2019 15:59:58 GMT 7
For FP: Do you know what they are invested in? Normally they choose a range of funds. It's unusual for one to be suspended. For all to be suspended sounds very odd. Unless they have put you in only one fund, which again isn't common, and usually a sign they are wrapping an extra level of fees in something controlled by themselves to max what they can squeeze out of you.
I ask, as I know when I helped my mum's sister in the UK get out of one of these policies they used to give her all sorts of excuses and fob her off in so many ways. It used to take weeks and months to get access to her money when she wanted to withdraw anything from it. In her case she should never have been sold the policy in the first place. When I got involved, as she really didn't know what to do, I reviewed the policy and confirmed she should never have been in it. She would have been better with a normal bank account for her profile. I wrote them a stern letter, saying as much, with reference to my own qualifications as an accountant professional, 30 years+ of investing, and the need to take it to the relevant UK regulatory body at the time, if it didn't get expedited quickly and the policy cashed in. So they knew they were no longer dealing with someone who didn't know how things worked and could no longer be fobbed off. It took a couple of weeks or so, but was settled fairly promptly. Unscrupulous IFAs will do anything to hang on to your money for longer, and hence tehir fee income. Making it difficult to exit is not uncommon. Hence why you may need to go to FP direct. But it would help if you could let us know what the investment funds are.
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GWC
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Post by GWC on Jun 24, 2019 16:58:15 GMT 7
For FP: Do you know what they are invested in? Normally they choose a range of funds. It's unusual for one to be suspended. For all to be suspended sounds very odd. Unless they have put you in only one fund, which again isn't common, and usually a sign they are wrapping an extra level of fees in something controlled by themselves to max what they can squeeze out of you. You pretty much summed it up - Its one fund, "controlled" by themselves, without telling me they had any interest in it. Well known company, licensed by SEC etc, I did try report them, but they (SEC) wanted no part. I am dealing direct with FP on this, but they seem to want to leave it up to "Bangkok company" to sort out, which gives them the opportunity to get more fees, quite ridiculous!
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AyG
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Post by AyG on Jun 24, 2019 17:25:13 GMT 7
You pretty much summed it up - Its one fund, "controlled" by themselves, without telling me they had any interest in it. You are being extremely reticent to disclose details. This makes it more difficult to understand your situation. Are you saying that all your investments with FPI were in a single fund? Or it's one fund amongst a number held with FPI? And when you say "controlled by themselves", are you in fact getting confused by the name of the fund? FPI adds its own name (and additional charges) to the funds it sells. It does not, however, control them in any sense. As I said previously, it would be very helpful if you could post scans of your latest statements (omitting personal information) for both FPI and Investors Trust.
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