Many of you will have read my article last week regarding financial advisors in Spain charging substantially more than the equivalent service in the UK. In just the last few days I have had several people come to my office to see if I can help them reduce the fees they’re paying on their QROPS.
I saw a lady on Tuesday, we’ll call her Sandra (as before, I’ve changed her name to protect her privacy). The first thing Sandra explained was that every few months her advisor would hand her another wad of pages covered in numbers, charts etc., bamboozle her with complex terminology, and she’d leave the appointment none the wiser as to why her QROPS hadn’t grown over the last 4 years.
Well, finally she was sat in front of someone who would break it all down for her. The first thing I noticed was that she was paying over £1000 a year for the QROPS alone – this is more than double what she would pay for a UK SIPP (a UK based, FCA regulated pension that would offer all the major benefits of a QROPS and that she could easily move to).
I also questioned the fees on the funds she had been moved into, which were between 1.5%-2% per year – this is 3 to 4 times more than I’d expect a client to pay for a top performing UK fund, yet she was paying this for pretty average performing funds that I’d never even heard off (and that’s after 15 years of studying funds on a daily basis!).
In addition,she was paying another 1.5% per year in combined fees to her advisor and bond provider. When we broke it all down, her annual fees were over 4% of the total amount she had invested, and I calculated that around 3% of this was going to her financial advisor each year, most of which was in hidden fees which would be illegal in the UK. I was astounded by the combined level of fees here, and it’s safe to say, so was Sandra! The investment returns were barely covering her fees, which is why Sandra had seen no growth after 4 years.
My advice to Sandra was that we move her QROPS to a UK SIPP, which offers all the freedoms and flexibility she needs for less than half the price of a QROPS, and we would then rebalance her portfolio with FCA regulated funds, at a fraction of the cost of the offshore funds she had been recommended. This would bring her annual costs down to less than half of her existing arrangement, which will have a positive effect on the growth of her plan.
The exact overall fees paid will depend on the specific situation so may vary, but Chorus pride ourselves on fair, transparent and above all, value for money fees.
Chorus may not be the oldest, or indeed the biggest company out here in Spain, but we firmly believe that our approach to UK style, truly independent advice, makes us the best.
If you would like me to demonstrate where I can help reduce costs and improve the returns on your existing portfolio, including QROPS and Spanish Bonds, please call me today to book a free, no obligation review on 664 398 702 or email [email protected].