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Old 20.01.2012, 14:58
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17clarence 17clarence is offline
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Re: Fund management entity structures: Is this legal?

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A good friend of mine got into this scam of this "Advisory company" and signed up for a 25 year plan. Now he doesn't know how to get out with least amount of loss. I didn't know what to tell him either. Should he continue to make payments in the hope that at least he can get out his money by the funds producing enough to cover their excessive charges?

He has about 10K (EUR) in this "plan".
Eventually it will break even.
However the time it will take depends on the investment held in the 'magic wrapper'. If he gets lucky it will break even in under 8 years, as this seems to be the accepted time period it takes.

If he's unlucky, eg the funds take some hits, or he moves them around a bit incurring more charges, or much more likely the global resession creates a 10 year stagnant period, then it could take a whole while longer.

Lets not forget, the FTSE100 is (I believe) at a lower point now than it was in the year 1998.

All he can do is read the small print of the policy to see what the exit charges are and get the calculator out.
Shame he didn't do this before though.

Last edited by 17clarence; 20.01.2012 at 14:59. Reason: typo
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