Investment Advice


#1

Hi Guys,
I’m a long time pin member but rare poster. I really appreciate the advice I come across on the posts of others and this site prevented me from finally bowing to pressure and buying in 2006.
So, here is the deal.
I’m currently working in Asia and am close to 6 figures in terms of savings. I’ve recently been approached by a rep from DeVere’s with view to investing in an offshore account in the Isle of Man. The account that the agent favors offers 7.2% interest. Though a variable account I am informed that the 7.2% figure reflects 2004-2014 growth.
Having researched DeVere’s online I’m somewhat wary of dealing with them. I haven’t been nor will be hard sold but the net is full of stories of those who have been.
In any case I need to find a place for my cash that’s other than here as the financial system is not the most robust (only 10K guarantee on deposits, banks have closed their doors twice in the past 20 years)
What I would like to know is…
Where could I put my cash that’s legal, will beat inflation with a bit to spare and is safe.
Where I currently live does not have a tax agreement with Ireland so this is putting me off repatriating anything significant.
Thanks in advance, I welcome any advice you may have.

Cheers
N


#2

Beawre of devers


#3

It is impossible to earn a 7.2% return from a hands-off investment without risk.

Where is the risk? What is a “variable account”?


#4

+1
I don’t think there is anything that will beat inflation that is safe myself. More than happy to be proven wrong.
With that kind of cash its actually hard to find something decent, because its probably not enough to dedicate a large amount of time to understanding the investments so that you know the full risks. If you had a few million, like say a property landlord, you should be making plenty of time to understand all the risk involved in the Irish market, property ownership, credit risk etc, but that’s because its basically a full time job.
I think the only thing to do with your cash is find somewhere safe, like a well funded to big to fail bank, that has offshore facilities, and put it there, but it will not beat interest. If beating interest is really your think, take a few percent of it, and invest in equities of something you really understand, and are willing to take the time to understand. That’s the only way to truly protect your investment.


#5

Again, I’m very new to this and at the beginning of the process.
The person I spoke to said he could offer 5% fixed rate, a low risk variable that currently yields 7.2 and a riskier 12% product.


#6

This seems to be a common impression but when I looked on the web the main negative sentiment was that they were awful to work for.

I’m meeting the guy again on Wednesday to look at things more closely as I was in a rush at our last meeting.


#7

Cheers Macnnarb and the rest of you, all advice greatly appreciated. If DeVere’s are to be avoided could someone recommend a reputable outfit.
PS how close to matching inflation is realistic…?


#8

Inflation in what? What are you saving for? What is your investment timeline? How much do you need to keep on hand for emergencies (e.g. six months unemployment or sickness)?

Need to separate concepts of savings (storing taxed income for when you’ll need it later ) from investment (taking risk in order to get richer). Savings (barring very bad things happening) guarantee return of principal but will tend to get eroded by inflation, whereas investments do not guarantee return of principal but may grow faster than inflation.


#9

Noted with thanks Eschatologist,

I was originally thinking of buying a property in Ireland in 2015. I’m now uncertain how things will pan out I’m looking into different options. Ideally I’d like to invest roughly 50k for a minimum of 10 years with the option to extend. The model that was presented to me, where I could put down a principal and add to it monthly, quarterly or annually, suited my particular circumstances. I am single and have no dependents so am somewhat open to a limited punt on an offshore investment account. The DeVere product looked attractive in theory but I’m spooked by the organization. I just wonder who might offer the same service but without the bad press.


#10

How about a deposit account with HSBC in the Isle of Man denominated in USD or GBP if you are currently in euro and take the view that euro will weaken. (also they may be charging neg rates on euro accounts).


#11

I find it impossible to believe there is a guaranteed 5% APR return on a deposit anywhere in the British Isles. Is this a so-called “structured deposit” (example here) which includes a deposit component and a component invested in the stock market, and has a certain level of capital protection (up to 100%)? From reading an AAM post (which I can’t find now) the returns can be paltry even if the market does reasonably well, because most of your potential return is spent on providing risk insurance. My own bank rang me to discuss these types of investments recently, but I fobbed them off (by suggesting straight out they were lying to me about getting all the upside with 100% protection). My impression was that as term deposits from 3+ years ago mature, customers are not attracted by the tiny returns now available, and the banks are scrabbling to come up with alternative products.

Would be interested if anyone else knows more about these – I am just going by the tiny amount I have read/heard.


#12

I got chatting to a guy from DeVere’s a few years ago and, somehow, ended up having over for tea and a chat one evening - which lasted three hours. He was Irish, we were abroad, it all seemed to happen organically but for all I know they ingeniously targeted us with their local Irish guy. Not that we were/are rich but they probably reckoned that as expats we had a few quid. Again, they were overestimating us but that’s beside the point.

In hindsight, it’s embarrassing that we even let the chap across the threshold. I remember thinking that if we went for what he was suggesting and it all went pear-shaped, I would sound like an idiot on the subsequent Prime Time Investigates programme. The Pin would be mocking me for page after page. ‘He said we’d make big interest, reduce our tax bill and there was [almost] no risk…’.

I had Googled them too and, like you, mostly found articles by disgruntled ‘employees’ - mostly working independently under the DeVere name and occasionally being charged for training courses which they believed to be overpriced. They don’t seem to have a trail of burned investors.

After the first few minutes of this epic kitchen table chat we had already decided we were not interested. What he was offering just wasn’t for us. It was all about locking up a lot of money for a long time and the fees were not easy (for me) to understand. We wanted to keep whatever money we had for an eventual property purchase (still pending!) but he went on at great length about an endowment-style education fund for the kid(s) - only had one at that time - and wouldn’t take “leave it with us” for an answer. We were too polite about it - mainly because he was Irish and probably knows my Mam or her friend or my sister’s boss or something. Eventually, we got him out the door and agreed not to invite sales people around for tea any more. Still feel silly about it.

Then there were follow up calls, to which I said ‘Nah, it’s really not for us’. He said ‘well the least you can do is give me the names of five expats who might be interested’. I did - in me eye. Then a call came from an English guy explaining that my contact had left the company but they still wanted five names of friends/colleagues. I didn’t cooperate and eventually they gave up - after a few more calls/emails. Funny thing is that the guy who we’d had over for tea kinda vanished. There’s now no trace of him online and his LinkedIn profile disappeared after he parted with the company…

I asked a friend who works in financial services if he had heard of DeVere and he said there was nothing specifically bad about them. But all their products were so long-term that it’s still early days. The product they were pushing to us was run by a German fund so it seemed like there would be plenty of people taking a slice along the way. And we had said we were relatively risk averse (compared to some of the products they were offering with v. high yields) so this German thing was meant to make us feel better about it all.

Not sure that helps but there ye go! Nothing terrible happened, they didn’t plague us with calls, but there were fairly hard sell.


#13

I would agree. I am reminded by this completely unrelated story

independent.ie/business/pers … 92001.html


#14

If you do happen to speak to a DeVeres rep again or anyone else wanting your money, first question you want answered is how is he/she getting paid, a lot of these funds can be heavily front loaded ( ie a nice cut from your stache to pay the sales rep for making the “sale”. Also understand that ongoing fees can have a huge impact on you overall total return especially if you are in for the longterm ( google how much difference what might seem like a small percentage in fees can make to your euro amount in 10/15 years.).
As you asked for investment advice and you seem to be somewhat long term at least for 50K, here it goes

1/ Invest in a low cost index fund - ie some one charging lest than .3% fees to manage your money.
2/ Any well diversified fund, something like a total global market, total us market or UK - point is risk is spread across multiple companies/regions.
3/ Depending on your apetite for risk you may want to smooth the ride by having a percentage in fixed income ( a bond index fund for example)
4/ Rebalance yearly - ie maintain your ratio say 40%US/40%UK/20% bonds - (some funds do this automatically for you - Vanguard mentioned below has a life strategy fund)

Here in the US, Vanguard is a big and highly respected player in the index fund arena - I do know that Vanguard now offers funds in Europe

Here is a link to Vanguard - dig down and look at their index funds -

global.vanguard.com/portal/site/home


#15

I’m an ex-stockbroker myself and the DeVere’s name is reasonably well known in that industry.
I think they are a South African outfit.
Never dealt with them mind you, but I certainly wouldn’t perceive them as a dodgy institution.
They would be well established.
Always bear in mind though, it’s not the institution you are dealing with, but the individual broker.
Some are good, some not.

But regardless, a 7.2% interest rate just sounds wrong.
I can only think the money is being invested in high-yielding corporate bonds (or similar).
Just sounds too good to be true.

If you want, I can give you the name of a UK stockbroker who I would perceive as being good enough to manage my money (if i had any :stuck_out_tongue: ). He won’t give you the hard sell.


#16

If the OP has 100K to invest his first objective should be educate himself both on investments and on what exactly he is paying a broker for


#17

True.
But for those without the time …


#18

The OP may have a very full life but I doubt that a few hours research would not be time very well spent. I accept that we all at some point make a decision of the time value of money when considering to outsource certain tasks, such mundane things such as painting the house or cutting the grass, but with investments especially considering that the OP may be continuing to grow his investment for years to come could prove very costly.
To say I have 100k to invest but am too busy to do some research and will trust this broker guy with my hard earned cash is reckless, too may people are good savers but plead ingnorance on investments, its really not rocket science

This blogger is popular state side and is a good starting point to educate yourself on equity investing, some of the advise may appear US centric but the underyling message applies elsewhere, he even has a post for Non-US persons

jlcollinsnh.com/stock-series/


#19

My story is almost identical Ixelles. The guy shook my name out of a colleague under the guise of helping others to benefit from such a great deal etc. The hard sell hasn’t come yet but I’m due to meet him again tomorrow. It seems like they are using the same script.
N


#20

Many thanks Vincem, solid advise. I’ll look into Vanguard.