If you’re considering investing into a fixed-term savings or investment plan in the UAE, make sure you do your sums.
The National has asked an expert to calculate exactly how much five of the most commonly sold products in the UAE will cost you in charges – and the figures are astounding.
The products are administered by insurers such as Generali International (Vision), Zurich International (Vista), Friends Provident International (Premier), RL360 (Quantum) and Hansard International (Vantage) and sold to residents via financial advisers.
According to Julian Vydelingum, a chartered financial planner at AES International, an investor could pay up to 51.68 per cent of the amount they invest in charges as a percentage of their total contributions if they have signed up to RL360’s Quantum product over 25 years. That basically means that half your monthly investment is effectively stripped out of the plan.
With other products available here extracting similar amounts, it’s no wonder so many people are contacting The National complaining about being locked into poor-performing products.
Hence why we hosted The Money Round Table this week, where we invited six delegates to debate whether fixed-term savings and investment products have a place in a UAE resident’s investment portfolio.
With charges taking over half of what you put in – it appears it has no place at all. The calculation was based on an investor depositing US$1,222 or Dh4,500 a month into a 25-year-plan. For the RL360 product, that means total cumulative contributions are $366,600 over 25 years but the projected end value is only $352,343.46, assuming 4 per cent growth, which is less than you put in. This is because the plan’s cumulative charges are $189,459.97. This is the scenario for all the products in the table.
The costs include a high upfront commission fees and these are generally taken within the first two years of the product’s lifespan. The adviser and the life company are also funded via a myriad of fees such as the administration fee, plan fee, establishment charge, early discontinuance charge, premium protection cover charge … the list goes on.
All these fees must be paid in the event of an early exit, which is when most policy holders realise how much their plan is actually costing them.
So, if you have already bought into a plan, or are considering buying one, the table summarises the estimated future value and the charges as a percentage of the contributions made for the most prevalent products in the UAE marketplace.
arayer@thenational.ae
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Infiniti QX80 specs
Engine: twin-turbocharged 3.5-liter V6
Power: 450hp
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1 Joost Luiten produced a memorable hole in one at the par-three fourth in the first round.
2 To date, the only two players to win the PGA Championship after winning the week before are Rory McIlroy (2014 WGC-Bridgestone Invitational) and Tiger Woods (2007, WGC-Bridgestone Invitational). Hideki Matsuyama or Chris Stroud could have made it three.
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12 Paul Casey was a combined 12 under par for his first round in this year's majors.
13 The average world ranking of the last 13 PGA winners before this week was 25. Kevin Kisner began the week ranked 25th.
14 The world ranking of Justin Thomas before his victory.
15 Of the top 15 players after 54 holes, only Oosthuizen had previously won a major.
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17 The first round scoring average of the last 17 major champions was 67.2. Kisner and Thorbjorn Olesen shot 67 on day one at Quail Hollow.
18 For the first time in 18 majors, the eventual winner was over par after round one (Thomas shot 73).
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Director: Tim Burton
Rating: 3/5
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4pm: Maiden (Dirt) Dh165,000 1,600m
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5.10pm: Maiden (Turf) Dh165,000 1,600m
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5.45pm: Handicap (D) Dh190,000 1,200m
Winner: Private’s Cove, Mickael Barzalona, Sandeep Jadhav.
6.20pm: Handicap (T) Dh190,000 1,600m
Winner: Azmaam, Jim Crowley, Musabah Al Muhairi.
6.55pm: Handicap (D) Dh190,000 1,400m
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7.30pm: Handicap (T) Dh190,000 2,000m
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Percentage increase in visitors in eight years: 500 per cent
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You can donate to several registered charities through a “donation catalogue”. The use of the donation is quite specific, such as buying a fan for a poor family in Niger for Dh130.
The General Authority of Islamic Affairs & Endowments
The site has an e-donation service accepting debit card, credit card or e-Dirham, an electronic payment tool developed by the Ministry of Finance and First Abu Dhabi Bank.
You can donate online or order Smiles n’ Stuff products handcrafted by Al Noor students. The centre publishes a wish list of extras needed, starting at Dh500.
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Dar Al Ber Society, which has charity projects in 39 countries, accept cash payments, money transfers or SMS donations. Its donation hotline is 800-79.
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Sheikh Mohammed bin Rashid Al Maktoum launched the Noor Dubai Foundation a decade ago with the aim of eliminating all forms of preventable blindness globally. You can donate Dh50 to support mobile eye camps by texting the word “Noor” to 4565 (Etisalat) or 4849 (du).
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Emirate: Sharjah – Khor Fakkan
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1 UAE 5 5 0 10
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3 Saudi 5 3 2 6
4 Kuwait 5 2 3 4
5 Bahrain 5 1 4 2
6 Maldives 5 0 5 0
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When: Friday until March 9
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Information: www.emirateslitfest.com
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26 - New Zealand v England at Auckland, March 1955
30 - South Africa v England at Port Elizabeth, Feb 1896
30 - South Africa v England at Birmingham, June 1924
35 - South Africa v England at Cape Town, April 1899
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