Long term savings plan - Vantage Platinum II

[lostinfinance]

Hello,

I’m a Spanish citizen currently in an expat position in South East Asia. Recently, I met a financial advisor who proposed a retirement savings plan called “Vantage Platinum II” from a Company called Hansard International.

To be honest, I don’t know much about these things, but as far as I can tell this plan seems incredibly bad.  Here are the details:

An overview of Hansard International:
•   Established in 1987 and listed on the London Stock Exchange since 2006 (4th largest stock exchange in the world)
•   Based in Isle of Man – 90% investor protection under The Isle of Man Life Assurance (Compensation of Policyholders) Regulations 1991.
•   Tax efficient – no local tax on capital growth or income which accrue on assets held with Hansard
 
The benefits of Vantage Platinum II:
•   Payment flexibility – stop, start and reduce premiums after first 24 months contributions have been invested (minimum contribution £325, $500 or €450)
•   Total flexibility from day one (if required) – option to prefund first 24 months to allow 100% flexibility from the beginning
•   Additional regular contributions – can increase contributions at any time starting from £150, $200 or €175
•   Single contribution lump sums – from £2,000, $2,750 or €2,500
•   Access to capital – from all contributions and growth invested after month 24
•   Currency flexibility- ability to switch currency at any time free of charge (11 currency options available)
•   Full fund coverage – access to over 200 funds from leading fund managers
•   Online access – allowing you to switch and rebalance your portfolio free of charge online
•   Global flexibility – allowing you to take your plan to any other country you may move to.
•   Free premium collections – on debit or credit card (we can open a multi-currency offshore bank account to allow contributions to be collected free of charge each month on your required date)
•   New client incentive – based on investing €650 over 20 years - €2,600 bonus added to plan from day 1 (20 x  term in years)
•   Loyalty bonus – Added to plan every 5 years ( 0.25% of bonus and accumulator units value) From year 10 this increases to 0.75% added on year 15 and 20

I have also attached a brochure with the charges and a simulation done by the advisor on a 25 year plan, at 650 euros per month.

Many things seem wrong to me:
* Long initial allocation period. 
* No flexibility, basically if I ever touch the money before the end of the plan, I will lose money.
* The charges seems excessive.

What am I missing here?

I already told the advisor that I don't like this plan. I definitely want to start to invest in something because the money is piling up at the bank, but this seems far from ideal.

Any thoughs?

[Heckler]

I could be jumping to conclusions without enough data, but read this and make your own call.

https://forum.mrmoneymustache.com/investor-alley/i-dun-goofed/

[Heckler]

Hansard made £105 million revenue in 2015

https://en.m.wikipedia.org/wiki/Hansard_Global

Whats my point?  I was hoping to compare it to Vanguards revenue with $4B assets under mgmt, but its not a quick to find public numbet. 

[lostinfinance]

I could be jumping to conclusions without enough data, but read this and make your own call.

https://forum.mrmoneymustache.com/investor-alley/i-dun-goofed/

Yes, I read that thread. The plan is not exactly the same, but very similar. Another adviser also proposed RL360... I am starting to feel like I should get away from all these guys, and find my own way without any of them.

I work for a french company with a french-contract. I am not exactly sure what is the legislation for Vanguard in France. I need to have a look more in detail at their website. https://www.vanguardfrance.fr

[Pelusa existencial]

Hello lostinfinance and community,

this topic is now 2 years old - what have you decided to do?

I am in a similar situation, German origin living in Chile, Vanguard is NOT available to non US-Citizens, and at least in Chile there is nothing even remotely similar to Vanguard or Betterment when it comes to fees. I, too, was recommended this plan by a financial advisor (who has a great reputation among Expats). But is this the right choice for a Mustachian?

On the other hand, while it has disadvantages, maybe this plan is not the worst if you don΄t have access to Vanguard?

Happy to recieve any thoughts on the subject!

[reeshau]

I could be jumping to conclusions without enough data, but read this and make your own call.

https://forum.mrmoneymustache.com/investor-alley/i-dun-goofed/

Yes, I read that thread. The plan is not exactly the same, but very similar. Another adviser also proposed RL360... I am starting to feel like I should get away from all these guys, and find my own way without any of them.

I work for a french company with a french-contract. I am not exactly sure what is the legislation for Vanguard in France. I need to have a look more in detail at their website. https://www.vanguardfrance.fr

You have a good thought here.  You hear these kinds of plans from "financial advisors" because they are paid a high sales commission by the companies.  Vanguard, or any index fund, isn't going to pay enough commission to support a salesperson.  So, they only way you find out about the cheapest, best options is on your initiative.

It is the nature of the beast.

In the US, there is the option of a fee-only financial planner, who could commit to fiduciary responsibility.  (Which has a specific legal definition)  Because they don't sell for anyone, developing a financial plan will cost several hundred dollars.  That is your first clue:  if the service is free, with nothing upfront, then they are making money by selling you something.  This need limits what options they can present to you.

I have no idea what alternatives you may have, but if an adviser approaches you, tell him or her you would like to talk about your plans, but will not buy anything through them.  That will be a test, and if they are salesmen, they will walk away and no longer bother you.

[flipboard]

I am in a similar situation, German origin living in Chile, Vanguard is NOT available to non US-Citizens, and at least in Chile there is nothing even remotely similar to Vanguard or Betterment when it comes to fees. I, too, was recommended this plan by a financial advisor (who has a great reputation among Expats). But is this the right choice for a Mustachian?

On the other hand, while it has disadvantages, maybe this plan is not the worst if you don΄t have access to Vanguard?

There's nothing special about Vanguard (they used to be a long time ago, but not anymore). There are plenty of other sources where you can buy low-cost index funds (mostly in the form of an ETF).

Depending on tax situation (combination of actual tax-law, dual-tax treaties, and other factors):
- You can get an account with Schwab or Interactive Brokers and buy US-domiciled ETF's (you can even buy Vanguard ETF's if you really want).
- You can get an account with Interactive Brokers and some other brokers, and buy IE-domiciled ETF's.

Which route is better is something you need to figure out yourself, all of them let you build a cheap total-world index portfolio.