I have news. I've been had by Dubai's financial advisers. So what? After all, I am but one of many. Well, let me not mince my words: never take out these policies. You know the type, the ones where you commit to a monthly payment that goes into funds.
They are a rip-off. No other way of putting it. To date, I have only ever come across one person who made good and that is because he is a banker who, having become wise to what was going on, took over the management of the policy, got out of everything his broker bought into and made the right calls vis-à-vis sectors, areas of the globe and funds. But who has the time or knowledge for that? That is why we seek out "professional help".
The only thing is, they're not helping us. They're helping themselves to our hard-earned cash and putting up smoke and mirrors when asked pointed questions about charges.
In October, I started really looking into two policies. I had taken them out at times of emotional turmoil, as is so often the case. Many of us do this - it could be the wonderful news of birth and a new life you're responsible for, divorce and its fallout, or some other upheaval.
This means we are probably dealing with extra stresses and, in wanting to do right by our dependants or our future selves, become prey. In my case the magic word "mirror" was never used. Nor was the option of taking out a policy for five years presented - longer commitment means more commission for the broker and disabling penalties for us. This is serious mis-selling and misconduct.
In my mission to determine whether the policies are worth keeping, I did two things. One is reach out to the brokers who sold them to me and the companies that issued them. The other is meet numerous financial advisers to garner their take on my situation, my options and corresponding pros and cons.
It has been an eye opener. Nay, a shock to the system. I had one confide that he and his wife have similar plans and that he just views it as a savings tool - not a good investment. I will repeat this: a qualified personal adviser, who sells these products and who set up his own advisory business in the UAE, has similar policies that he took out when younger, and sees them purely as a piggy bank. The money that he gets out of them when they mature is a bonus that he "saved" and didn't fritter away.
But this isn't OK. We're sold these with the view that they are expertly managed and will gain wealth over their lifetime. Problem is, it is always just out of reach.
I had one question: how much have I paid out in fees to date. I wanted to make decisions and needed facts.
Reasonable enough you would think. Because I'm asking for past facts, not future predictions. Nope. It took months, many emails and then reams of paper - 84 and 87 pages from the respective issuers. Every page consisted of line after line of numbers, some in brackets. I was then told to add up the ones in brackets to get the figure. But even that - had I done it - does not give me the real total that has been paid out in fees.
The long and short of it is that the financial advisory company Killik & Co was the only outfit that said it would look over the policies, get information that I had been asking for and give me a solid, fact-based overview. And it did so. Eventually. Not for the lack of trying, but because the companies it reached out to took their sweet time responding. But even Killik couldn't access the real total annual charges being levied. Instead it came up with an educated guess. This is what mirror funds mean. They mean you cannot see or know real charges incurred for the mirrors and smoke.
The bottom line is, we would never be sold these types of policies in developed markets. Be warned. They only work in favour of their stakeholders - and you and I aren't one of them.
It is at best opaque, at worst deliberately deceptive. Once you have signed, you'll be hit with a financial penalty whatever you do. If you choose to get out before its lifetime you pay a penalty, if you stick with it, you're losing out on fees that include initial unit charges, plan fee, fund administration charges and external fund annual management charges.
These "known" charges (excluding mirror fund charges) mean that you're about 4 per cent out of pocket straight off the bat every year. No, your broker didn't tell you this, and no, the companies that create the products don't provide information easily, willingly or within a reasonable time frame.
Then you've got the mirror fund charges. Julian Vydelingum from Killik was the only person to put it in context regarding my plan: between 0.1 per cent and 3.35 per cent each year, depending on the mirror fund chosen. They also have other charges embedded in their mirror funds but do not make these explicit as they are built into the fund price. As a guide, other life companies levy an additional mirror fund charge of 0.75 per cent on top of the fund annual management charges, so it is probable that your issuer charged a similar amount on their mirror fund range.
So I was dealing with probably a 4.75 per cent annual charge. That is huge. According to Nobel Prize winner William Sharpe, fund investments (on aggregate) earn the market's return, before fees. Then fees are taken out. Ergo over time, they will underperform the market in direct proportion to the fees charged. Please reread and let it sink in.
We all make decisions we regret, but what we do about them is key. More of the same is madness.
Nima Abu Wardeh describes herself using three words: Person. Parent. Pupil. Each day she works out which one gets priority, sharing her journey on finding-nima.com. You can reach her at nima@finding-nima.com
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
Results
2.15pm: Maiden (PA) Dh40,000 1,700m; Winner: AF Arrab, Antonio Fresu (jockey), Ernst Oertel (trainer).
2.45pm: Maiden (PA) Dh40,000 1,700m; Winner: AF Mahaleel, Antonio Fresu, Ernst Oertel.
3.15pm: Sheikh Ahmed bin Rashid Al Maktoum handicap (TB) Dh200,000 2,000m; Winner: Dolmen, Richard Mullen, Satish Seemar.
3.45pm: Handicap (PA) Dh40,000 1,200m; Winner: Amang Alawda, Sandro Paiva, Bakhit Al Ketbi.
4.15pm: The Crown Prince of Sharjah Cup Prestige (PA) Dh200,000 1,200m; Winner: AF Alwajel, Tadhg O’Shea, Ernst Oertel.
4.45pm: Handicap (PA) Dh40,000 2,000m; Winner: Al Jazi, Jesus Rosales, Eric Lemartinel.
COMPANY%20PROFILE
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Important questions to consider
1. Where on the plane does my pet travel?
There are different types of travel available for pets:
- Manifest cargo
- Excess luggage in the hold
- Excess luggage in the cabin
Each option is safe. The feasibility of each option is based on the size and breed of your pet, the airline they are traveling on and country they are travelling to.
2. What is the difference between my pet traveling as manifest cargo or as excess luggage?
If traveling as manifest cargo, your pet is traveling in the front hold of the plane and can travel with or without you being on the same plane. The cost of your pets travel is based on volumetric weight, in other words, the size of their travel crate.
If traveling as excess luggage, your pet will be in the rear hold of the plane and must be traveling under the ticket of a human passenger. The cost of your pets travel is based on the actual (combined) weight of your pet in their crate.
3. What happens when my pet arrives in the country they are traveling to?
As soon as the flight arrives, your pet will be taken from the plane straight to the airport terminal.
If your pet is traveling as excess luggage, they will taken to the oversized luggage area in the arrival hall. Once you clear passport control, you will be able to collect them at the same time as your normal luggage. As you exit the airport via the ‘something to declare’ customs channel you will be asked to present your pets travel paperwork to the customs official and / or the vet on duty.
If your pet is traveling as manifest cargo, they will be taken to the Animal Reception Centre. There, their documentation will be reviewed by the staff of the ARC to ensure all is in order. At the same time, relevant customs formalities will be completed by staff based at the arriving airport.
4. How long does the travel paperwork and other travel preparations take?
This depends entirely on the location that your pet is traveling to. Your pet relocation compnay will provide you with an accurate timeline of how long the relevant preparations will take and at what point in the process the various steps must be taken.
In some cases they can get your pet ‘travel ready’ in a few days. In others it can be up to six months or more.
5. What vaccinations does my pet need to travel?
Regardless of where your pet is traveling, they will need certain vaccinations. The exact vaccinations they need are entirely dependent on the location they are traveling to. The one vaccination that is mandatory for every country your pet may travel to is a rabies vaccination.
Other vaccinations may also be necessary. These will be advised to you as relevant. In every situation, it is essential to keep your vaccinations current and to not miss a due date, even by one day. To do so could severely hinder your pets travel plans.
Source: Pawsome Pets UAE
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Our legal consultants
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Company%20profile
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Company profile
Name: Steppi
Founders: Joe Franklin and Milos Savic
Launched: February 2020
Size: 10,000 users by the end of July and a goal of 200,000 users by the end of the year
Employees: Five
Based: Jumeirah Lakes Towers, Dubai
Financing stage: Two seed rounds – the first sourced from angel investors and the founders' personal savings
Second round raised Dh720,000 from silent investors in June this year
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How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
BEETLEJUICE BEETLEJUICE
Starring: Winona Ryder, Michael Keaton, Jenny Ortega
Director: Tim Burton
Rating: 3/5
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Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Cultural fiesta
What: The Al Burda Festival
When: November 14 (from 10am)
Where: Warehouse421, Abu Dhabi
The Al Burda Festival is a celebration of Islamic art and culture, featuring talks, performances and exhibitions. Organised by the Ministry of Culture and Knowledge Development, this one-day event opens with a session on the future of Islamic art. With this in mind, it is followed by a number of workshops and “masterclass” sessions in everything from calligraphy and typography to geometry and the origins of Islamic design. There will also be discussions on subjects including ‘Who is the Audience for Islamic Art?’ and ‘New Markets for Islamic Design.’ A live performance from Kuwaiti guitarist Yousif Yaseen should be one of the highlights of the day.