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Expat retirees with private pensions at risk of bad advice
| Published: | 19 Sep at 6 PM |
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As the UK financial authority prepares to sign off on the biggest shakedown of the private pension industry for two decades, what can expats do to make sure of their financial futures?
It seems that those in the know are finally realising that the casino culture wasn’t confined to the big players, as the new UK Financial Conduct Agency is flexing its muscles on the mis-selling of financial products to the man in the street. More protection from commission-hungry salesmen in the UK is great, but what do expats use as a safety net?
Retirees with private pensions are most at risk across many of the world’s favourite expat destinations, as there’s little protection and sharks come in many guises. The best way forward is to dredge up every drop of information before making any decisions, then search out a reliable, fully-qualified FA via local recommendation, ignoring those who approach you either by phone or in person.
Annuity brokers are especially tricky, as they offer comparisons between different providers’ rates, but typically never offer advice as to whether an annuity is even appropriate. The reason, of course, is the commission paid, which can be as high as 20 per cent, and the responsibility for choosing the right product is squarely on the client’s shoulders.
Many retirees can’t cope, and few realise the pitfalls, including the loss of all their capital to the insurer in the case of their early death, leaving their dependents with nothing. A number of financial experts in the UK now believe annuity brokers should be banned.
Finding a local FA who understands that the best way to get more business is to have happy customers may be difficult, but it’s essential for a well-funded retirement. One rarely-heard piece of advice for retirees in good health is to leave the purchase of an annuity until you’re 75, at which point rates might have soared and your advancing age will bring a higher payout.
It seems that those in the know are finally realising that the casino culture wasn’t confined to the big players, as the new UK Financial Conduct Agency is flexing its muscles on the mis-selling of financial products to the man in the street. More protection from commission-hungry salesmen in the UK is great, but what do expats use as a safety net?
Retirees with private pensions are most at risk across many of the world’s favourite expat destinations, as there’s little protection and sharks come in many guises. The best way forward is to dredge up every drop of information before making any decisions, then search out a reliable, fully-qualified FA via local recommendation, ignoring those who approach you either by phone or in person.
Annuity brokers are especially tricky, as they offer comparisons between different providers’ rates, but typically never offer advice as to whether an annuity is even appropriate. The reason, of course, is the commission paid, which can be as high as 20 per cent, and the responsibility for choosing the right product is squarely on the client’s shoulders.
Many retirees can’t cope, and few realise the pitfalls, including the loss of all their capital to the insurer in the case of their early death, leaving their dependents with nothing. A number of financial experts in the UK now believe annuity brokers should be banned.
Finding a local FA who understands that the best way to get more business is to have happy customers may be difficult, but it’s essential for a well-funded retirement. One rarely-heard piece of advice for retirees in good health is to leave the purchase of an annuity until you’re 75, at which point rates might have soared and your advancing age will bring a higher payout.
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