I previously ran a small bespoke firm of independent financial advisers in the UK and subsequently did a brief stint with Globaleye Financial Advisers based in Malaysia. The contrast couldn’t have been different.
Unlike in Great Britain, no matter what you might read to the contrary, the offshore industry is like the ‘Wild West’. Sure, jurisdictions like Hong Kong & Singapore benefit from a relatively strict regulatory environment, but in the main, Asia especially is a very dangerous place for investors to be off guard.
In nearly 12 months at Globaleye I did no business whatsoever as I couldn’t accept the products that advisers were recommending, all of which paid high up-front commissions and were only being preferred because they lined the adviser’s pockets with big money. In the vast majority of cases clients would have to wait years to recoup these costs, if ever.
The problem isn’t just with Globaleye, the problem is widespread in the offshore investment marketplace, where companies are free from ‘hard disclosure’ (of commission) and regularly encourage investors to sub-invest via ‘investment bonds’ into obscure, little known underlying funds that pay additional amounts of commission(s) through the back door – to the adviser. In most cases adding a double or triple layer of charges to the unwitting investor.
In addition to investors (mainly ‘expats’) being ripped-off by high charges, there are numerous cases of clients being encouraged to invest into very high-risk investments run by a plethora of ‘shell companies’ based in secretive tax havens such as the British Virgin Islands, Belize and the Cayman Islands where ownership of these companies remains a mystery.
When a Savings Account – Isn’t
Over the last few months I have been contacted by several of my previous clients who have retired abroad and wished to ‘run something past me’ regarding advice they had received to invest via a ‘Protected’ Savings Account. After scanning the documentation it was immediately obvious that the products being touted were far from what the ‘Headlines’ and glossy blurb purported them to be! This prompted me to write this article.
These so-called ‘Savings Accounts’ were little more than ‘contracts’ linked to specific market outcomes where (if everything worked out) investors would receive ‘interest’ and guaranteed return of their capital. The interest is in fact a type of ‘coupon’ and the capital is only guaranteed to the extent that whatever markets the product is linked to, don’t collapse during the fixed term. So then – not really guaranteed at all. In the developed West, any company advertising such products as ‘Savings Accounts’ that are better than (or similar to) traditional interest-paying Bank Savings Accounts would be in jail.
Offshore Alert Website
After living in Asia for many years and hearing of numerous investment scams, fund collapses and huge losses suffered by investors (mainly expats) it wasn’t long before I noticed several in-depth investigations of fraudulent activity came from the same source, namely the Offshore Alert website.
Run by David Marchant, an investigative journalist responsible for the ‘Breaking News’ of several offshore investment scams, the website is a education.
For a modest monthly fee, members can access in-depth articles about many offshore investment scams and educate themselves about just how much criminality is present in the offshore investment arena. Would you rather pay a monthly subscription for this – or risk your life savings taking a ‘punt’ on something that sounds too good to be true?
My tip for any expat is to at the very least check out the Offshore Alert website. I am sure you will be astounded at the losses incurred by many investors, the ongoing fights for justice and the sheer extent of dubious activity present in the offshore investment marketplace.
I have no affiliation with Offshore Alert and I am not remunerated in any way whatsoever. This is a tip for all expats looking to safeguard their hard earned money!
Forewarned is indeed Forearmed
Clink the link to visit the Offshore Alert website: LINK