Prometheus, having upset Zeus once too often, was chained to a rock and every morning an eagle would arrive and eat his liver, which grew back overnight. This scenario was repeated every day for 30 years until Hercules came upon Prometheus in his quest to find Zeus’ golden apples and so killed the eagle.
While the image of this may he hard hitting there is a symbolic link with the plight of the offshore investor.
How many expat investors are chained into an investment that they cannot get out of?
How many investors then see the ‘’eagle of commission, investment fees and admin costs” eat away at the growth of the fund every year, year after year?
Unfortunately, having completed his twelve tasks, Hercules is not around to rescue investors from this torture. So, what can investors do?
Ideally, three things to consider before investing-
· Avoid funds that charge a front-end load
· Avoid funds that charge a redemption fee ( Lock you in, with a high exit penalty )
· Invest in funds that have a lower expense ratio
Often, tax efficient investments such as pensions are sold with insurance funds for supposed ‘additional tax efficiency’ - the reality is that these are just ways of ratcheting up the fees.
As for additional tax efficiency, there is none. In fact, the combination of these insurance funds with pensions make as much sense as going to work wearing two pairs of trousers. That would double your clothing costs and it would surely restrict your movements.
Cost Benefit Analysis
If you are unfortunate enough to find yourself already in an inflexible, expensive contract with high exit costs then some time spent with a fee based investment specialist, that is truly independent, may be time well spent.
Low cost investment platforms may save many thousands of pounds in the long run even if there is a cost to unchain yourself from the current structure.
Isn’t it time to say goodbye to the eagle and get your investments used to wearing just the one pair of strides, so as not to slow them down?