Author Topic: Royal London 360 - I dun goofed  (Read 73758 times)

What da

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Re: Royal London 360 - I dun goofed
« Reply #150 on: March 16, 2016, 02:02:46 PM »
Thanks for your answer. Just to clarify I pay 1.5% per year. 1% goes to RL360, 0.5% goes to the advisor.

Also I forgot to mention the 0.50% deposit charge is only applicable to the Initial Allocation Period. After that there are no more charges but the 2% bonus on the monthly premium continues.

The advisor today confirmed there are no other charges. No fund manager fee's etc. So when I'm doing the math between my policy and for example yours where you only pay 0.5% annually ($3.000 monthly premiums, 4% annual return) the difference after 20 years is $55.000,- / 4.5% of the fund value. Sure its not nothing but I wonder if thats worth canceling a policy over. There is a quarterly meeting with my advisor and if I would have to investigate these funds myself I wonder how much time it would consume. I will definitely study the links that you send me, thank you very much for that.

I also have a Broker account with AvaTrade that I opened just for fun/learning experience at the moment. I did see you can also invest in ETF's (which a few posters previously mentioned is worth looking at). However it looks like with that broker you have to pay overnight charges when you enter long or short positions for an ETF. Appear to be between 2-3% which isn't cheap either... Perhaps thats only cause its leveraged trading and if I would invest thru my bank this might not be charged?

Anyway, to answer your questions (not sure how that nice looking quoting works so please bear with me):
Expat? Yes. Expat in a very warm, tax free country.

Future Plans? Planning to stay a while and no plans to go back home anymore. However I would not feel comfortable investing using a local account so thats why I was happy to use the RL360 offshore one.

Move a lot? Future moving totally depends on the job market so bit hard to answer that one.

Off to reading your links now!
« Last Edit: March 16, 2016, 02:04:26 PM by What da »

StockBeard

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Re: Royal London 360 - I dun goofed
« Reply #151 on: March 16, 2016, 02:19:02 PM »
So when I'm doing the math between my policy and for example yours where you only pay 0.5% annually ($3.000 monthly premiums, 4% annual return) the difference after 20 years is $55.000,- / 4.5% of the fund value. Sure its not nothing but I wonder if thats worth canceling a policy over.
Bottom line: you need to redo your math more carefully, as I believe you are misunderstanding lots of the fees. I calculate a difference of hundreds of thousands of dollars under acceptable market conditions (either 4% or 8% return), up to 50% of the fund value. At 4% return you might not even beat inflation. Details below.


Quote
Also I forgot to mention the 0.50% deposit charge is only applicable to the Initial Allocation Period.
I think you're misunderstanding the contract here. Can you confirm this for sure? In my case, the 0.5% deposit charge was applicable to the initial allocation *units*, not *period*. These units live through the entire life of your contract, meaning you still pay a fee on the money you invested in the first x months of the contract, for 20 years. This would be a huge difference with my contract (or my understanding of it) if you actually only pay for the first 20 months.

[Edit: the RL 360 website confirms what I thought: http://www.rl360.com/row/knowledge/quantum/quantuminitialunits.htm
It says (emphasis mine):
"There is a specific initial unit charge which applies throughout the premium payment term, but ONLY on initial units. The charge is 0.5% per month of the value of the initial units held."

My tool is correct. In your case you will end up paying a total of approximately $90'000 with that fee alone, for your first 20 months of investments. So, to be clear: you're paying $90'000 in fees for your $60'000 invested.
]

I am unaware of the Deposit Bonus, and my tool does not take that into account. This could offset some of the fees but to me this only helps to complexify the contract more, which is not a good thing.
[Edit: I can't find any mention of a "deposit bonus" in the rl360 Quantum documentation. Could you scan the part of your contracts that mentions it and how it works?]

With a 4% return yearly before fees, you are overly conservative. I think the market on average returns 7%. Just food for thoughts


you only pay 0.5% annually
Just to be clear, I personally pay 0.05% annually, not 0.5%.
At 1.5% you still pay 30 times what I do. The 0.5% for "alternate plan fee" I put in my php file is kind of a "worst case scenario" thing that takes dividend taxes into account (when I was in Japan I calculated that my actual cost on my taxable brokerage account was 0.25%: 0.2% in taxes and 0.05% in fund management fees).

Edit:
The advisor today confirmed there are no other charges. No fund manager fee's etc.
This directly contradicts the RL360 Quantum documentation, as it is on their site today (http://www.rl360.com/generic/downloads/rl360-quantum-terms-and-conditions.pdf ). Either your advisor chose specifically funds that charge no fee (hint: these don't exist, minimum fee is 0.04% and it goes up to 2.25%, see below), or he doesn't actually understand the fees (happens a lot more than you might think), or he is lying to you. I quote from the terms and conditions:

Quote
d) External fund management charge
The manager of each external Fund will deduct an annual  management charge. This will be allowed for within the  pricing of the individual Funds, at a rate determined by  the manager of each Fund. The charge will vary according  to the Fund chosen and further details can be obtained from the Policyholder’s Investment Adviser or the  Investment Guide, as is updated from time to time.

Of course your contract might be different, but this would be highly surprising.
Note that my tool also assumes no fund fees anyway (I should update it), so there's not much to be discussed here :)

Edit 2: From the official documentation (http://www.rl360.com/generic/downloads/rl360-quantum-investment-guide.pdf), the fund annual charges vary from 0.04% to 2.25%.

So, to summarize, you're paying:
- 1% to RL360
- 0.5% to your adviser
- 1% or more to the fund managers (there are only 20 funds out of hundreds that charge less than 1%, so I'm using 1% as a reasonable average here)
- The initial unit charge (close to $100'000 over 20 years)
- the policy fee (close to $2500 over 20 years).

You're at least paying 2.5% in fees annually.

The benefits you get:
- The premium incentive: $13'500 (the premium incentive is in initial units, meaning you pay the 0.5% fee on that). Note how this is dwarfed by the initial unit charge.
- The Deposit bonus (I haven't heard of that, you need to explain)
- The loyalty bonus: 5% of the policy value (basically offsets less than the last 2 years of fees)

Quote
However it looks like with that broker you have to pay overnight charges when you enter long or short positions for an ETF. Appear to be between 2-3% which isn't cheap either...
Make sure you are not confusing a "one time" fee with a yearly fee. If the broker is charging you 3% every time you buy some shares, it sucks, but in the long run it will be much, much less than a system that charges you 2.5% of your total wealth every single year.

One more data point:
From the official Documentation here: http://www.rl360adviser.com/generic/downloads/qu016.pdf
You would need a 1.38% growth rate annually to break even with a 20 years plan at $3000 premiums. That's without taking external fees into account (the fund fees). In other words, this means RL360 charge you approximately 1.38% annually once everything is said and done, bonuses etc... taken into account. (unclear if they count the advisor fee in here, they say 1.5% contract charge, you say you have 1% contract charge + 0.5% advisor fee. I recommend you double check your numbers. In my case I was paying 1.5% contract charge + 0.5% advisor fee. But let's assume their number includes the advisor fee)
add about 1% in fund fees (you can compute how much you actually pay by looking at the doc I linked to above, and weight each fee by the percentage of each fund in your portfolio) and you're at 2.38% in fees annually. 47 times what I pay. And that's from the official documentation, that's not me playing with the numbers here
« Last Edit: March 17, 2016, 08:42:36 PM by wololo »

dungoofed

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Re: Royal London 360 - I dun goofed
« Reply #152 on: March 17, 2016, 07:24:40 PM »
Thanks for your answer. Just to clarify I pay 1.5% per year. 1% goes to RL360, 0.5% goes to the advisor.

Also I forgot to mention the 0.50% deposit charge is only applicable to the Initial Allocation Period. After that there are no more charges but the 2% bonus on the monthly premium continues.

The advisor today confirmed there are no other charges.

Hi What da. What were the exact words the salesperson used to say that you pay 1.5% per year, no other charges?

dungoofed

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Re: Royal London 360 - I dun goofed
« Reply #153 on: March 17, 2016, 07:51:31 PM »
btw there are charges for being in the various mutual funds. If you have a look here:

http://www.rl360.com/generic/downloads/rl360-quantum-investment-guide.pdf

You can see the AMC and Performance fees. You don't "pay" these per se, but these fees are automatically taken off the value of the fund. So if you had 100 units of Janus US 20 at $1 each, if after one year the value of the underlying stocks had increased 1.25% the fund would still be 100 units worth $1 each; if you had have bought the underlying stocks they would be worth $101.25.

Vanguard ETFs have AMCs too but they are called "MER" and they are handled exactly the same way. To say that you don't "pay" them is disingenuous at best.

And the best part? According to an insider working at one of those funds, a percentage of that fee is returned to Royal London as a kickback for putting you in the fund (I haven't bothered to confirm whether that kickback is then redistributed to the salesperson, although people elsewhere on the net have mentioned it several times).

StockBeard

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Re: Royal London 360 - I dun goofed
« Reply #154 on: March 17, 2016, 08:22:38 PM »
Vanguard ETFs have AMCs too but they are called "MER" and they are handled exactly the same way. To say that you don't "pay" them is disingenuous at best.
Exactly. If we go by that logic, my Schwab ETFs cost me absolutely nothing since the only fee I'm charged is the "AMC", which for example is 0.03% for SCHB.

What da

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Re: Royal London 360 - I dun goofed
« Reply #155 on: March 18, 2016, 11:15:49 PM »
Hi Wololo & Dungoofed,

Yes you are right, I have discovered the 0.50% is being charged the entire contract. That is insane and it was not explained to me like that. It was also not explained to me that this charge is applied to the initial bonus. After adjusting my spreadsheet I do come to the same numbers you are mentioning. Big disappointment.

The deposit bonus I get is that they add 2% on each monthly premium. So I deposit $3000,- and they add $60.

Regarding the funds, my adviser told me that RL360 has arrangements with 300 different funds so that they do not pay any fee's when using them. He mentioned the particular funds that I am in do not have any fee's associated with them. He said there are other funds that can be chosen that do have fund management fee's..

My advisor did mention that if I would open an account with a broker and invest in similar funds myself I would have to pay a percentage on top of the initial deposit (around 4%) and that they would charge annual fund fee's which would come out roughly the same. Now from reading your posts this doesn't even remotely come close to how low your costs are with either Vanguard or Schwab...

dungoofed

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Re: Royal London 360 - I dun goofed
« Reply #156 on: March 18, 2016, 11:50:29 PM »
I'd still like to know how the adviser worded it.

"The effective fee over the course of the plan is 1.5%"

is assuming that you never take a "holiday" and continue to pay in the same amount every month for the duration of the plan. The moment you vary from the course your effective fee has increased.

The mark asks about fees, and they ask about holidays and reducing payments, and the two are answered separately. The mark feels as though he has done his due diligence.

--

Regarding the funds, again your adviser is telling the truth: if you were to walk in off the street you would have to pay a bunch of fees, things like a front-load fee. The trick in this case is that the forgone conclusion is that people actually buy these funds. They don't. Not when they see the math. They buy index tracking ETFs instead.

stashgrower

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Re: Royal London 360 - I dun goofed
« Reply #157 on: March 19, 2016, 12:42:53 AM »
Thankfully I've never been sold one of these products! I am only posting to applaud dungoofed and MMM posters on a high quality thread and helpful discussion. Dungoofed, I am sorry to hear of your loss. At least your courage is helping others avoid an expensive course of action.

StockBeard

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Re: Royal London 360 - I dun goofed
« Reply #158 on: March 19, 2016, 01:49:25 PM »
Regarding the funds, my adviser told me that RL360 has arrangements with 300 different funds so that they do not pay any fee's when using them. He mentioned the particular funds that I am in do not have any fee's associated with them. He said there are other funds that can be chosen that do have fund management fee's..
I still feel this part is extremely fishy. The official RL360 documentation mentions absolutely no fund with no fee. The vast majority of the funds has a fee of 1% or more, and the minimum I found is 0.04%. If they had such a thing as a "no fee" fund, don't you think they would mention it in their documentation or on their site?

(Keeping in mind that even if the fund's fee was 0, we're still taking of somewhere between 1.38% and 2% in fees for everything else, as described above)

What da

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Re: Royal London 360 - I dun goofed
« Reply #159 on: March 19, 2016, 01:51:20 PM »
Where would a non-American expat go to to purchase Index Tracking ETF's without having to pay these extra charges? And do these ETF's pay out dividend as well?

StockBeard

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Re: Royal London 360 - I dun goofed
« Reply #160 on: March 19, 2016, 02:08:37 PM »
There's no easy answer for that, you need to be more precise and probably open a different thread: It depends on your nationality, where you live today, and your plans for life.

Locally: there must be a broker in your country that does not charge expensive fees to get ETFs. For example, In Japan, people tend to recommend Nomura, Rakuten, and SBI, but that would assume the expat living in Japan intends to stay in Japan for a very long term (they'd have to close the account when they leave the country).

your country of origin: You could also check in your country of origin. For example, I believe French expats are allowed to have an "assurance vie" (life insurance)  in France which is a low-cost wrapper around funds, including ETF's, and I think it is tax deferred.

If you plan to move a lot, you need an "offshore" platform:
I have already recommended to you Andrew Hallam's "guide to expatriate investing" above, which has many answers (see his site here: http://millionaireteacherbooks.com/global-expat/ , This is not an affiliate link, I bought the book on Amazon about 2 months ago and I recommend it to all expats). I have also mentioned Interactive Brokers to you (I do not have a contract with them, neither have I ever tried their services, but they are mentioned in Andrew's book), have you checked them? Andrew's guide also recommends a company named DBSVickers, I haven't tried them either.

Some ETF's pay dividends.

none of the above should be mistaken with financial advice. I'm basically you, roughly 2 years in the future. I do not have any finance degree neither do I claim I know what I'm talking about.

Edit:check schwab and vanguard too! I know they do not accept clients from Japan, but they might accept you.
« Last Edit: March 19, 2016, 02:26:01 PM by wololo »

What da

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Re: Royal London 360 - I dun goofed
« Reply #161 on: March 19, 2016, 03:16:45 PM »
Yes your correct, best not to clutter this topic too much. Did purchase the book you mentioned and will engage in an online chat with Schwab after the weekend. Vanguard 'says No' on their website.

Many thanks for all your advice!

sendaiben

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Re: Royal London 360 - I dun goofed
« Reply #162 on: March 23, 2016, 12:24:10 AM »
Ok. So with that 1.5% what I am looking at, that's 1.59% growth necessary? (25 year 10000 usd pm)

For me the structured idea (retirement forget and ignore sort of thing) was the only reason I was considering it before seeing this thread, is anyone doing something better in Japan? Where should I be looking?

Hope it's okay to post this, but I run a website/community for residents of Japan. Two things you should look into are the J401k and NISA accounts -both provide tax-free investment options. More info at retirejapan.info

Post in our forum if you need more specific information :)
« Last Edit: March 23, 2016, 12:45:57 AM by sendaiben »
-information, advice, and community for residents of Japan: www.retirejapan.info

StockBeard

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Re: Royal London 360 - I dun goofed
« Reply #163 on: April 04, 2016, 08:04:21 PM »
I dug some old promotional document I was shown by the advisor back in 2012 to convince me to join RL360.
Except for the blurred out parts, all of it is exactly as it was given to me. In particular, note how the "10% return" is highlighted with a green marker, as if it was the "realistic" target. This was done by the advisor.

The 10% return is after everything's been taken into account. The text mentions the contract charge (1.5%) pushing the 10% return to an actual 11.5% return, but does not mention the advisor fee (0.5%) or the fund fee (which we've established above is probably around 1%).
So we're talking of an average return of 13% per year for 30 years in order to reach the kind of numbers that were advertised to me. All the legal mumbo-jumbo is here of course, but is that an honest way of advertising a financial product? I'd be interested to know if anyone has ever had an average 13% return with RL360.


One born every minute

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Re: Royal London 360 - I dun goofed
« Reply #164 on: April 25, 2016, 12:23:23 AM »
 You know the term 'There's one born every minute', well I am that one. Not only do I have one of these RL360 Quantum policies, I also transferred my frozen (due to now being an expat) UK pensions into a qualifying recognised overseas pension scheme or QROPS for short.

 I only have a couple of payments left before the initial allocation period expires on the quantum policy. Using Wololo's calculator, it says I will have a 300,000 USD profit when the policy matures but I'm guessing that I got the figures wrong somehow. Also, as I'm now out of work and may be for a while, I'm going to have to take a holiday from paying which will make things even worse. So I guess I can say goodbye to the money I've paid so far.

 Regarding the pension, it shows a 40% loss on the last statement I received. This is what made me start searches on the net for Royal London and here I am.
Both the notes in the pension are showing unrealised losses and from what I read on the net, that doesn't seem good. My advisor says that there are barriers and the notes are within the barriers and they will pay out in the end and that I would only lose if I cashed in today but, I'm not sure if I believe them as these are the same people that sold me the policies.

 I've looked on the net and there are other advisors out there that claim to be able to reduce charges and x-ray your current investments etc. but googling for some of them brings up bad reviews so it seems to be a bit of a jungle out there. A lot of the jargon in contracts and policies goes over my head so I was wondering if any of you here know of any international advisors who do truly care about their clients or are they all bad.

elle1984

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Re: Royal London 360 - I dun goofed
« Reply #165 on: May 19, 2016, 01:16:38 AM »
Hi everyone,

Me and my husband are another victims of the financial adviser who sold us  RL360. We have contributed with 4100 dollars monthly for the last 15 months. After looking into it and reading all the comments we can't help but wonder what's the best thing to do: give it all up (around 60k) or reduce the premium to 320 dollars and lose everything gradually. We have initiated a complaint that managed to reduce our initial plan set for 25years to 18 years. We are fighting to have the whole thing reversed and willing to involve the appropriate authorities and social media. Has anyone been able to have it reversed? Any happy endings to this nightmare? We desperately need a ray of hope.

StockBeard

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Re: Royal London 360 - I dun goofed
« Reply #166 on: May 19, 2016, 09:43:34 AM »
Hi, elle1984.
About your question about the best thing to do: you need to seriously run the math  in a spreadsheet. This thread provides lots of spreadsheets that help you do the math and make your decision. Spoiler alert: I think you'll find that it's best to cut your losses than continue in the plan, but again you have to do the math yourself.

Quote
Has anyone been able to have it reversed? Any happy endings to this nightmare?
I know of only two cases were people have been able to get their money back with an ILAS in a case that was outside the contract "rules" (e.g. early cancellation). In both cases they had to involve the media (respectively the telegraph and some popular money blog which name evades me right now) to put some public pressure on the companies behind the insurance.

These ILAS contracts are known to be legally constraining, and some people have said that the only way to come out (money-wise) positively with an early cancellation is to die. That's a tongue-in-cheek joke obviously, but is not far from the truth, as the only case where the contracts allows you to not pay an excessive early surrender fee is in case of death, in which case your significant other gets 101% of the value of the policy.

You might be able to involve the authorities, but they will only be able to go after the financial advisor, not the insurance company. It's still a good idea to do so, as the more people engage authorities in this matter, the more data countries will have to build a case against these products and regulate them better.

elle1984

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Re: Royal London 360 - I dun goofed
« Reply #167 on: May 22, 2016, 04:21:31 AM »
Hi Wololo,

Thank you so much for your reply. We are in the process of building our case. We have contacted the Telegraph and now looking for the best ways of attack. We are gonna make a formal complaint at the financial regulator in Qatar. We are after the financial adviser who lied to us and tied us in this ridiculous plan. Funny enough he is our friend (or was) and we have some incriminatory conversations that could help our case. Also we can prove he has lied to us and hopefully we will have a positive outcome. We will keep you posted.

Hoping we can stop this cons before they ruin more lives.

human

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Re: Royal London 360 - I dun goofed
« Reply #168 on: May 22, 2016, 04:33:53 AM »
What nightmare. I can't believe backing out would cost a whole year's worth of investments. Aren't there laws or regs against this? Or is the issue how to enforce?

elle1984

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Re: Royal London 360 - I dun goofed
« Reply #169 on: May 23, 2016, 12:11:36 AM »
I know. These people are cons. The more years they tie you in the more commission they get. They're unscrupulous and they're out there to destroy lives. Be careful people.

We have appointed a lawyer and we are willing to fight it till we get our money back. 

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Re: Royal London 360 - I dun goofed
« Reply #170 on: May 26, 2016, 11:15:59 PM »
Hi everyone,

Me and my husband are another victims of the financial adviser who sold us  RL360. We have contributed with 4100 dollars monthly for the last 15 months. After looking into it and reading all the comments we can't help but wonder what's the best thing to do: give it all up (around 60k) or reduce the premium to 320 dollars and lose everything gradually. We have initiated a complaint that managed to reduce our initial plan set for 25years to 18 years. We are fighting to have the whole thing reversed and willing to involve the appropriate authorities and social media. Has anyone been able to have it reversed? Any happy endings to this nightmare? We desperately need a ray of hope.

The good news is if you are able to set aside $4k/mo, you can weather a $60k loss, chalk it up to a lesson learned, and still do very well in the end.  Maybe it sets your plans back a year but no more

Dicey

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Re: Royal London 360 - I dun goofed
« Reply #171 on: May 27, 2016, 10:36:43 AM »
I'd lost track of this thread, so I'm glad to see it pop up again. Commenting to help keep it high on the list as a cautionary tale. So sorry these vultures are still in business and so intent on trampling on other's right of free speech.
I did it! I have a journal!
http://forum.mrmoneymustache.com/journals/a-lot-like-this/
And hell yes, I am still moving confidently in the direction of my dreams...

Kalergie

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Re: Royal London 360 - I dun goofed
« Reply #172 on: June 10, 2016, 03:45:47 PM »
I just read the entire thread and just wanted to express my sympathy for the people affected. I have lived in the UAE for 4 years. the financial "consultants" here are like sharks. I get calls every week from these guys but I know the best thing is to hang up.

Most of my colleagues at work have investments with these shady firms. I sometimes ask a few questions (MER,, advisor fees, surrender fees) but I find that my intend to help is received negatively...so I just shut up about it. One guy just said its better than leaving his cash in the pub. I guess that's true :/

My wife was approached by a guy who's been dating her best friend. They are from the same country. He has been very pushy calling my wife (and many other friends from our group)  repeatedly saying he "just wants to look out for his fellow country-men". Until I told him to cut if off. I mentioned index funds and vanguard to him and he smiled and never called again.

My neighbor also works as a financial consultant. He's a nice guy actually and he sometimes sits with me explaining to me how hard the job is. Commission based salary, threats to get fired, visa cancellation, no medical insurance unless you meet your target. It's brutal. As he's a nice guy, not surprisingly, the guy is very unsuccessful in getting (and keeping) business. Customers leave him before the 24 months period and he has to give back the commission he made (and spent). So he's constantly in debt, constantly about to lose his job and since defaulting on debt is against the law here, he's constantly with one foot in jail.. He's just not cut out for this harsh industry. He hates what he's doing to his clients and to his family. I urged him to get out of this crappy industry but if he does, he has to give back most of his prepaid commission. It's a mess!!!


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Re: Royal London 360 - I dun goofed
« Reply #173 on: June 11, 2016, 11:12:21 PM »
I'm just adding another "thanks" for this thread. I posted a thread of my own asking some questions and was pointed to this one. Needless to say I will not be investing in RL360 and I'm very very thankful to have read all this before I made any silly mistakes. I think it can be really difficult for expats who don't have easy access (or any access) to some of the other products people mention, especially those (like me) who move frequently. Thank goodness for the internet and for forums like this one! So a big thanks to those of you who were willing to share your stories.

africk78

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Re: Royal London 360 - I dun goofed
« Reply #174 on: June 17, 2016, 06:10:18 AM »
I have a similar potential problem that I want to get ahead of--I'm an American living in Europe for the foreseeable future, and my family and I generate anywhere from 40-150USD per year of post-tax income that we'd rather invest than have in cash, with a goal of retiring early and relatively luxuriously, at least by MMM standards (no private jets, but plenty of vacations). 

I was recently offered what is called an "International Retirement Plan" from a UK company called Blacktower; this IRP was designed by another group called Trireme, and the investment fund recommended for making contributions is RL360.  The costs associated are similar to what other posts have laid out, but there are other benefits--I'll include what I know here:

--a "premium incentive" of getting 2% "bonus allocation for each premium paid through the policy term"
--an initial bonus of 9180 USD invested for me upon the outset of the contract
--a the loyalty bonus (.25% added per year) to my assets for as long as I make contributions.
  These "bonuses" are confusing to me as I'm not sure I've seen anything like them in U.S. asset management strategies.
*It also sounds like I can make all contributions by credit card, which is great, since I have a card that yields 2.2% cashback.

Other benefits are that I can begin making withdrawals as soon as I turn 50, that I can withdraw up to 300kUSD tax-free for my first withdrawal, and that I don't pay tax on the growth (like a Roth), just the principal (like a regular IRA) upon withdrawal.

Additional costs:
--the "charge on initial units" of .5% per month, and an ongoing contract charge of 1.5%, deducted as .125% of current fund value each month. 
--finally, an initial $2kUSD set-up fee, and a yearly $1500 management fee

I definitely understand the management costs are high, but I don't "need" any money I'm contributing and am approaching the investment strategy as high-risk, high-rewards, with a willingness to incur investment losses in the short or medium term, with the expectation of higher returns in the long-term.

Still, in the back of my head I keep thinking I should just open up a SEP IRA, max that out (my circumstances would allow me to put close to 50k in there every year as a kind of supersized IRA) along with Roths for both my wife and I, meaning we'd be investing until we're 60 rather than 50, not invest quite as much as we would in the "IRP" that's being marketed to me and just spend it instead.  In other words, there's a strong case to put everything into a Vanguard index with super low costs, stop thinking about investments all the time so that my mind can focus on life, and just be done with it.

Please correct me if I'm wrong (and correct me in detail), but right now I'm not convinced that what I'm looking at is a "scam" per se; I do however think I'd need to be very confident in my earnings expectations for the next 15 years (I'm 37 years old) to be a regular contributor, and those contributions would need to be high for the costs to be acceptable.  Then the question is, how much do I need to contribute in order for this strategy to be more profitable than socking everything away into a mix of Roths, SEPs, 529s for my kids (4 and 2 years old, thank you) and brokerage accounts?

MDM

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Re: Royal London 360 - I dun goofed
« Reply #175 on: June 17, 2016, 11:07:45 AM »
1) If something sounds too good to be true, it probably is.
2) IIRC there is a spreadsheet attached to a post upthread - have you entered your information in that?

pbkmaine

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Re: Royal London 360 - I dun goofed
« Reply #176 on: June 17, 2016, 11:20:25 AM »
It seems simple to me. When everything I read says it's a scam, except for what the company itself says, then I am going to stay the heck away.

What da

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Re: Royal London 360 - I dun goofed
« Reply #177 on: June 17, 2016, 12:22:16 PM »
africk78 well at least they gave you most of the actual cost...in my case they didn't. I see you didn't include the fund management fee which is roughly 1.5% per year as well depending on the fund... Look in your contract because there is no way around this fee. My advisor said it would not be applicable to me which is a lie.

Anyway, whatever you invest during the first 2 years will for the remainder of your contract be subjected to:
6% initial unit charge
1.5% contract fee
1.5% fund management fee
So thats 9% per year....anytime the fund makes less then that you are loosing money.
So if the fund during 1 year drops with 5% you just lost 14% of your investment...The next year you would need to make 25%(!!) to recover those losses.. 16% to get back to the previous amount + 9% to cover the fees.

Sure you get a 2% deposit fee but thats one time....the 6% fee keeps running for the entire contract duration..

The initial setup fee and annual management fee go straight to your advisor. This guy should really be in jail!!!!! Because aside from what you are paying him he also receives money from RL360. My former plan did not have any of these fees. Anyway all info on this plan is written pretty clearly in this thread so I'm not sure why your even having doubts. Guys like your advisor should really be removed from this planet. Plain ordinary thieves. Spend a good amount of hours reading through these forums to discover a good way to save money. If your American your lucky, get a Vanguard account and put all your money in ETF's. Unfortunately its a lot harder for us Europeans to find a similar setup...

Trevor Reznik

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Re: Royal London 360 - I dun goofed
« Reply #178 on: June 18, 2016, 03:19:15 AM »
If your American your lucky, get a Vanguard account and put all your money in ETF's. Unfortunately its a lot harder for us Europeans to find a similar setup...

Can't you just get an international trading account (IG markets?) and buy the American domiciled ETFs?

Seppia

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Re: Royal London 360 - I dun goofed
« Reply #179 on: June 19, 2016, 07:45:07 AM »
There's vanguard in Europe.
Only difference is you have to pay purchasing fees since it's only available through brokerage accounts.

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Re: Royal London 360 - I dun goofed
« Reply #180 on: July 12, 2016, 02:09:52 AM »
Interesting to see this whole thing totally blew up in the last few years.

Much respect to MMM for not bowing to the bogus legal threats.
I'm glad it was able to help a lot of people.

Please note if you're using the Google sheet, rather than emailing me to ask for editing rights (happens 2/3 times a month) select "Save a copy" and you can edit that copy to your hearts content, without corrupting the original.

:)

LivingAbroad

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Re: Royal London 360 - I dun goofed
« Reply #181 on: August 30, 2016, 06:49:15 AM »
I'm happy Mr Money Mustache is standing up to RL360. In addition to their expensive, bad-for-customers products, their customer service is totally appalling. They stonewall every query and complaint. And they don't seem in the least bit afraid of you going to the Isle of Man Ombudsman.

quantum123

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Re: Royal London 360 - I dun goofed
« Reply #182 on: December 04, 2016, 09:08:37 PM »
I also fucked up!

Yes, just another fool that got sucked in. I entered the Quantum plan November last year and has been paying 3000usd/month on a 20year plan.
Yesterday I blocked my VISA card, emptied my account and wrote my bank not to pay a single dime to RL360.

I understand the plan now and if I finsh my initial period I will have to pay ~420usd/month just to cover the charges. If I chose to continue with just 300/month after the initial period Ill end up making 17000usd in 20 years - and I dont even think that accounts for inflation......
I would be super happy if someone could modify the MDM's otherwise excellent excel sheet to work with different premium levels for initial and accumulation units!

@dungoofed: You ended up surrendering your plan. What did you do to try and get your money back?
@elle84: How did it go for you?

Yesterday I have sent a proposal to RL360 about transferring my current payments to an Oracle account instead of surrendering. Hope to get an answer of sorts from them during this week.
« Last Edit: February 08, 2017, 11:14:12 PM by quantum123 »

arebelspy

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Re: Royal London 360 - I dun goofed
« Reply #183 on: December 04, 2016, 09:50:00 PM »
Oof, that sucks.  I'm glad you caught it now.  Hate how scummy they are.  =/

Be interesting to hear your experiences trying to break free, please keep us updated!

Welcome to the forums.  :)
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quantum123

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Re: Royal London 360 - I dun goofed
« Reply #184 on: December 05, 2016, 01:03:23 AM »
I case RL360 agree to convert to an Oracle plan... Can someone help me check how the return will be on a 20 year Oracle plan with a 60000usd lump sum?

Does this look right (I am a total newbie with excel)?

Oracle               
Year      Start up fee 7,5% annual   Adm fee 1,2% annual   Inflation   Growth incl inflation
1   60000   4500   720   1,50%   6%
2   57196   4290   686      
3   54523   4089   654      
4   51974   3898   624      
5   49545   3716   595      
6   51110      613      
7   52723      633      
8   54388      653      
9   56105      673      
10   57876      695      
11   59703      716      
12   61588      739      
13   63532      762      
14   65538      786      
15   67607      811      
16   69742      837      
17   71943      863      
18   74215      891      
19   76558      919      
20   78975      948      
Total   78027            

Can this be right???
« Last Edit: December 05, 2016, 01:05:12 AM by quantum123 »

MDM

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Re: Royal London 360 - I dun goofed
« Reply #185 on: December 05, 2016, 05:49:50 AM »
Does this look right (I am a total newbie with excel)?
...
Can this be right???
Are you saying that Oracle takes a 7.5% fee each of the first five years?  If so, that's tantamount to robbery.

quantum123

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Re: Royal London 360 - I dun goofed
« Reply #186 on: December 05, 2016, 07:30:36 AM »
Does this look right (I am a total newbie with excel)?
...
Can this be right???
Are you saying that Oracle takes a 7.5% fee each of the first five years?  If so, that's tantamount to robbery.

Copy/paste from the "Oracle Key Features"

Establishment fee
The standard establishment fee is 7.50% of the premium paid. The fee is collected at a rate of 0.375% quarterly in arrears over the fi rst 5 years. Each additional premium will be subject to its own establishment fee. The fee will be collected in the same format as described above.

*I misread that...1.5% annually.

Percentage administration fee
There is a standard ongoing percentage administration fee of 1.20% per year, taken as 0.30% of the current policy value or the premium paid, if higher, deducted quarterly in arrears. Each additional premium is subject to its own percentage administration fee. The fee will be collected in the same format as described above. The percentage administration fee is payable for the lifetime of the policy.

Additional fees
The funds that are held within your policy will be subject to an annual management charge. The charge will vary per fund chosen and further details can be obtained from your fi nancial adviser or the Investment Guide. The annual management charge set by the fund manager is refl ected in the fund price, and is in addition to the Oracle product charges.

Year   Lump sum   Start fee 1.5%/y   Adm fee 1.2%/y   Fund fee 1.5%/y   Inflation   Growth
1   60000.00   900.00   720.00   900.00   0.015   0.08
2   61147.22   917.21   733.77   917.21      
3   62316.38   934.75   747.80   934.75      
4   63507.90   952.62   762.09   952.62      
5   64722.19   970.83   776.67   970.83      
6   65959.71   989.40   791.52   989.40      
7   67220.88   1008.31   806.65   1008.31      
8   68506.17   1027.59   822.07   1027.59      
9   69816.04   1047.24   837.79   1047.24      
10   71150.95   1067.26   853.81   1067.26      
11   72511.39   1087.67   870.14   1087.67      
12   73897.83   1108.47   886.77   1108.47      
13   75310.79   1129.66   903.73   1129.66      
14   76750.76   1151.26   921.01   1151.26      
15   78218.27   1173.27   938.62   1173.27      
16   79713.83   1195.71   956.57   1195.71      
17   81237.99   1218.57   974.86   1218.57      
18   82791.29   1241.87   993.50   1241.87      
19   84374.30   1265.61   1012.49   1265.61      
20   85987.57   1289.81   1031.85   1289.81      
End   89003.79               
« Last Edit: December 05, 2016, 08:27:17 AM by quantum123 »

MDM

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Re: Royal London 360 - I dun goofed
« Reply #187 on: December 05, 2016, 10:58:09 AM »
Establishment fee
The standard establishment fee is 7.50% of the premium paid. The fee is collected at a rate of 0.375% quarterly in arrears over the fi rst 5 years. Each additional premium will be subject to its own establishment fee. The fee will be collected in the same format as described above.
*I misread that...1.5% annually.
Percentage administration fee
There is a standard ongoing percentage administration fee of 1.20% per year, taken as 0.30% of the current policy value or the premium paid, if higher, deducted quarterly in arrears. Each additional premium is subject to its own percentage administration fee. The fee will be collected in the same format as described above. The percentage administration fee is payable for the lifetime of the policy.
Additional fees
The funds that are held within your policy will be subject to an annual management charge. The charge will vary per fund chosen and further details can be obtained from your fi nancial adviser or the Investment Guide. The annual management charge set by the fund manager is refl ected in the fund price, and is in addition to the Oracle product charges.
Thus perhaps tantamount only to petty theft.  Or maybe worse - see below.

Quote
Year   Lump sum   Start fee 1.5%/y   Adm fee 1.2%/y   Fund fee 1.5%/y   Inflation   Growth
1   60000.00   900.00   720.00   900.00   0.015   0.08
2   61147.22   917.21   733.77   917.21      
...
19   84374.30   1265.61   1012.49   1265.61      
20   85987.57   1289.81   1031.85   1289.81      
End   89003.79
I don't follow how the table is organized, but do you
 - start with $60K,
 - make no further contributions, and
 - end up with $89K after 20 years?

If so, that's (89/60)^(1/20) - 1 = 2% growth per year.  If you could get 5% growth per year, your $60K would become $159K in 20 years.  In this situation Oracle will have "taken" $70K from you, so that still smells more like robbery than petty theft....

dragoncar

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Re: Royal London 360 - I dun goofed
« Reply #188 on: December 05, 2016, 09:02:23 PM »
might be real growth since they have an inflation column. 

quantum123

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Re: Royal London 360 - I dun goofed
« Reply #189 on: December 05, 2016, 09:43:36 PM »
Help!

I am formulating a complaint to the Ombudsman about Quantum. This is what I have so far. Any suggestions to the content or how I can better the phrasing? I am not native English speaker so.....

Complaint 1:
The way Quantum is constructed it will initially eat away at your investment faster than you are putting money in - paying RL360 its fees but not providing the consumer with any effective return for the first many years. This totally negates the purpose of a pension saving as these initial years lost profit will have a huge impact on the final outcome.

Complaint 2:
The flexibility of Quantum is extremely poor. Very few people will be able to foresee their financial situation 20-25 years in the future. Exiting the plan just 5 years early will incur a massive 34% penalty and all the money invested during the initial period will be inaccessible for the full term.

Complaint 3:
Quantum punish you very hard for decreasing your payments over time, as a fixed fee, based on the initial payments is charged every month. The best approach with Quantum would actually be to start with very small payments for the initial period and then increase over time, which defy any normal idea of a pension saving.

Complaint 4:
Quantum lures you in with big sign-up bonuses, to pay big premiums during the initial period. This is very good for RL360 but very bad for people when they find themselves not being able to keep up the pace. You are then faced with the choice of loosing your the majority of your investment by surrendering the policy or see it wither away as you keep putting money in.

Complaint 5:
Tying all of the above together to see how Quantum will actually work for you is next to impossible without through knowledge on the subject.
« Last Edit: December 05, 2016, 09:47:44 PM by quantum123 »

DavidAnnArbor

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Re: Royal London 360 - I dun goofed
« Reply #190 on: December 06, 2016, 05:54:35 AM »
And this is why we need a Consumer Financial Protection Bureau, along with strict banking regulations. Yes government is good !!!!

quantum123

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Re: Royal London 360 - I dun goofed
« Reply #191 on: December 06, 2016, 07:45:16 PM »
BUMP...

Does anyone have contact with "dungoofed" or "elle84"? I have send them PM's but no response yet. I am VERY interested in hearing about their experiences and what they did to try and minimize their losses.

MDM

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Re: Royal London 360 - I dun goofed
« Reply #192 on: December 06, 2016, 08:08:22 PM »
Does anyone have contact with "dungoofed" or "elle84"? I have send them PM's but no response yet.
It appears neither has logged in here for several months.  That doesn't help you get info, but at least they aren't specifically ignoring you.

Dicey

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Re: Royal London 360 - I dun goofed
« Reply #193 on: December 06, 2016, 10:34:41 PM »
BUMP...

Does anyone have contact with "dungoofed" or "elle84"? I have send them PM's but no response yet. I am VERY interested in hearing about their experiences and what they did to try and minimize their losses.
Try reaching out to one of the moderators. They've been known to be very helpful ;-)
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angryperson

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Re: Royal London 360 - I dun goofed
« Reply #194 on: February 03, 2017, 02:49:23 AM »
Hi everyone, a lot of people seem to be having issues with RL360 Quantum, and other products, such as PIMS.

If you're in that boat, a group is being put together at Pension Life to bring legal action against them, since the Ombudsman in the IOM appears to be useless too.

Have a look around the website here: http://pension-life.com/.

And get in touch with angiebrooks [ at ] pension-life.com. If a few can come together we stand a good chance of getting some recourse.

quantum123

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Re: Royal London 360 - I dun goofed
« Reply #195 on: February 03, 2017, 03:26:37 AM »
This is fantastic! I already sent Angie an email.

quantum123

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Re: Royal London 360 - I dun goofed
« Reply #196 on: February 08, 2017, 11:13:03 PM »
Hi

My adviser says that RL360 is open for a restructuring of my Quantum plan to better fit my needs. IF that is actually the case, what do you think would be reasonable?

My thoughts:
1. RL360 will reclaim the signup bonus
2. RL360 will cancel the 0.5%/month Initial Unit Charge for the full policy term
3. RL360 will cancel all Investment Adviser Fees
4. RL360 will lower the minimum monthly premium to 50usd
5. RL360 will allow withdrawls of both initial and accumulation units (for specific purposes like buying a house, hospital treatment and other "extraordinaty" events)
6. ???

MDM

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Re: Royal London 360 - I dun goofed
« Reply #197 on: February 08, 2017, 11:31:07 PM »
IF that is actually the case, what do you think would be reasonable?
6. ???
6. RL360 will return all contributions with no surrender fee.

Dicey

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Re: Royal London 360 - I dun goofed
« Reply #198 on: February 09, 2017, 12:16:18 AM »
IF that is actually the case, what do you think would be reasonable?
6. ???
6. RL360 will return all contributions with no surrender fee.
I'd move that to #1. Here's hoping!
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quantum123

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Re: Royal London 360 - I dun goofed
« Reply #199 on: February 09, 2017, 01:04:53 AM »
IF that is actually the case, what do you think would be reasonable?
6. ???
6. RL360 will return all contributions with no surrender fee.

Haha however amazing that would be I know that RL360 will not let go of the money that easily so I try to be "realistic" in my terms.