Tuesday, 09 July 2019 / Published in Advice, EFPG, Financial Advice, Investment Advice, Products, Tax

Even experienced investors can fall victim to scammers. No matter how much experience and confidence you have with investments and finances, you could still be at risk. Investment scams are usually difficult to spot because they’re designed to look like genuine investments. The scammers may have a professional looking website and documents.

The investments on offer are designed to be attractive – higher than market rate returns are offered and often are purported to be guaranteed. Our personal greed can easily conquer our common sense when a large enough carrot is dangled.

There is a difference between an investment that drops in value and an investment scam. Investment funds can lose value significantly but this is generally down to normal market fluctuations or investment decisions. If you are advised to invest in such a fund, your adviser should have informed you that the value of the fund can go down as well as up. Generally, after a drop in value over time a decently managed fund will regain what it has lost and start making gains.

Investment scams, however, can be designed to fail and will only lose value – potentially completely. Other investment scams may not be designed to fail but are significantly more risky than how they have been portrayed when sold to you. You may lose a chunk of the amount that you have invested and you may not be able to gain access to what is left for several years if the funds have been invested in illiquid assets such as distressed property or private equity investments.

There are lots of individuals and entities out there searching for people and companies to sell fraudulent or extremely high risk investments to.

Avoiding Scams

Obviously do not respond to cold calls or unsolicited e-mails and GET ADVICE FROM A REGULATED ADVISER before making an investment decision.

EFPG thought by releasing a series of blog posts detailing some of the questionable investments that we have seen, it might help our readers to avoid some of the pitfalls of investing.

No 1 –  The Kijani Commodity Fund

This fund was repeatedly presented to EFPG by other financial advisers to see whether EFPG (acting as pension trustees) would accept the investment in our pensions – we repeatedly rejected it.

The final time we were approached was when the fund was under investigation by the Mauritius regulatory authority. Subsequently the fund moved to the Cayman Islands, then suspended and eventually liquidated with a 100% loss to the investors.

It took EFPG a few minutes to reject this fund the first time round and on one occasion a new member of staff rejected it in around 5 seconds. Why? It had all the features of a Ponzi scheme.

The Fund’s June 2015 fact sheet suggested annualised returns of 20% were achievable and it had made just one loss month-on-month in four years.

The fund was supposed to be investing in commodities/co/mmodity companies but the performance of the fund bore no resemblance to the underlying commodity markets. The rationale of the incredible performance of the fund given to EFPG was that the fund made loans to a second entity and the interest receivable (not ever received) on those loans were the profits reported by the fund.

This second entity was called Kijani Resources and was an investment company mainly investing in commodity companies. However, the investment modus operandi, whilst being apparently above board, was subject to allegations that funds had been used to purchase shares in worthless shell companies whose Directors were personal/business acquaintances of the Directors of Kijani Resources. EFPG cannot state whether these allegations are factual or not but we can say that during our due diligence process, the information we gathered made us no more likely to permit investments in the fund than from our initial gut feeling.

The most famous Ponzi scheme of modern times was Bernie Madoff’s eponymous fund. For decades the fund reported strong investment returns that had been inflated by some $34 billion. A further $30 billion had been either misappropriated or returned to investors who had sold their shares at a false profit.

Wednesday, 12 June 2019 / Published in Advice, EFPG, Financial Advice, Life Insurance, Products, Services

Should you consider replacing your life cover policy?

  • Are you paying smokers rates but have stopped smoking?
  • Did you start your life policy over five years ago?
  • Are you in good health?
  • Have your circumstances changed?
  • Does your current policy cover critical illness?
  • Is the level of cover still sufficient?
  • Is your level of cover fixed or is it periodically reviewed?

The cost of life insurance has dramatically reduced over the last few years, all the above are reasons to review your life cover.

You may be able to increase your level of cover without paying extra.

Did you know smokers rates are twice that of non-smokers? If you have given up for longer than 12 months we may be able to provide a cheaper option.

Old style policies did not have critical illness cover. Considering that you are more likely to suffer from a critical illness than die, this is worth considering.

Have your circumstances changed? Marriage, children it might be a good time to review levels of cover and include your partner.

For a free impartial review of your protection needs please contact us to arrange an appointment with one of our experienced advisers. If you do not ask you will not find out.

Friday, 07 June 2019 / Published in Advice, EFPG, Financial Advice, Products, Services, Tax

EFPG has just posted an article about considerations that both employees and employers should consider about the Occupational Scheme or Group Personal Pensions that the employer is offering or is going to offer.

The article is not technical but covers general points that EFPG believes to be the most relevant areas that should be reviewed.

For employees the article covers the points:

  • How much will my employer pay into my pension?
  • How much will I have to pay into my pension? Is this flexible?
  • Will the combined contributions be sufficient to provide enough income in retirement? If not can you contribute more?
  • Where is my money going to be invested?
  • What costs will my pension face?
  • How flexible is the arrangement? Are there any penalties for altering/stopping contributions? Can the pension be transferred? Can the arrangement be cashed in and invested elsewhere?

For employers the article covers the points:

  • Should you offer your employees a pension scheme?
  • If so how much should you pay into it?
  • And at the end of the day will your employees thank you?

The full article is quite long but does give insight to the questions as posed above. If you would like to read it, please follow this link.

Tuesday, 07 May 2019 / Published in Advice, EFPG, Financial Advice, Investment Advice, Products, Services

How much does free advice cost?

That might sound like a daft question. The answer is obvious. Nothing – free means it doesn’t cost anything, Of course that cannot be the case unless a charity, government body or similar is giving the advice – even then that definition of free is arguable.

Financial advisers who offer free advice are intermediaries and are compensated by financial companies via commissions. So, there is always that angle of conflict of interest that one needs to be aware of. You really don’t know whether what they are selling to you is really good for you or good for them as a commission-generating sale.

There are less clear costs of not seeking advice as well.

The Cost of Education.

Do you want to spend the time to bring yourself up to a decent level of knowledge? Then to stay updated with the constant changes? How long will it take you to become knowledgeable?

The Cost of What You Don’t Know.

There are things that you know you need to learn, but what about the things that you don’t know you need to learn? How are you going to become aware of them?

The Cost of Consequences.

Do you understand how different things are interrelated? Actions in one area can often cause harm in another. How are you going to become aware of all the interconnected relationships and consequences?

The Cost of Mistakes.

Can you afford to learn from your mistakes? Some mistakes are minor, while others can be quite serious. If you make a mistake, how costly will it be, and do you have the time and resources to rebound from your mishap?

The Cost of the Unknown.

Do you have the temperament to do what is necessary to succeed? Sometimes the correct action or behaviour is counter-intuitive. Professionals are trained to cope with unplanned difficulties and disasters. How will you cope?

The Cost of Time.

What is the value of your time? How will you determine when you are spending too much time trying to solve a problem versus the alternative of paying someone else to solve it?

While there is a clear cost associated with engaging a financial adviser these subtler costs of not working with one when the situation warrants it should be taken into consideration.  When you stand to gain more than the fee charged by your adviser, the time is right to ask for advice.

How EFPG Charges – transparency

EFPG prefers to follow the UK’s RDR framework even though there is no requirement to do so in Gibraltar. When providing advice e.g. for a personal pension plan we would state the cost of the advice to you, the costs associated with investing your pension contributions (trading and custody) and the costs of the selected investments so you can clearly see all of the costs associated with your pension arrangement. We are completely transparent in this respect to give you the comfort in knowing that your investment for your retirement has no hidden charges or commissions that could negatively affect the quality of your retirement.

For the full article please follow this link

Friday, 12 April 2019 / Published in Advice, EFPG, Financial Advice, Investment Advice, Products, Technology

Everyone has heard of blockchain but most consider that it is synonymous with cryptocurrencies, especially Bitcoin.

Since the rise and fall of cryptocurrencies with Bitcoin trading at $3,588.38 (at the date this article was written) from a high of $19,783.21 in December 2017, one might consider Bitcoin and hence blockchain is dead or of little relevance.

This could not be further from the truth.

Blockchain technology has far more applications that are being researched and exploited.

This week HSBC has claimed to have settled three million foreign exchange transactions and made payments worth $250 billion using blockchain technology.

Blockchain is certainly not limited to facilitate financial transactions. The technology is being applied for uses in the logistics industry, to develop a decentralised internet, for real estate transactions and more.

Although crytocurrencies may have not been the best of investments at the end of 2017, investment opportunities in companies developing innovative solutions using blockchain might be very rewarding in the coming years.

For the full article please click here.