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Old 19.02.2018, 11:53
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Legal action for mis-sold expat savings policy

Hi all,

While living in Switzerland a few years back, a broker sold me an offshore expat savings policy (wonít mention any names in this post).


Key points:

- Before signing, the broker provided an illustrative example of the policy performance showing the fees at 1.5% per year. The policy term is 30 years.

- After a 5 years of negative performance, the policy has lost about 1% of its value. Not a substantial amount, but the funds I was invested in were generating 10% annualised returns.

- The reason for the difference, is because the fees are actually 7% per year. The broker claims that the company managing the policy did not tell him the charges were this high.

- I believe it is negligent for a broker to not know the fees of the policy he is selling.

- Where I am losing money is in the compounding interest, which I need for retirement. If I were to withdraw my funds, I will pay a 75% surrender value and loose CHF 15,000.


The policy documents themselves are very unclear in terms of fees. This is because:

(i) fees are quoted on a per month basis, over different paragraphs without any consolidated summary. The broker should have given me a proper big picture of the fees, which he did not do.

(ii) some of the fund fees are in an investment guide that was never given to me

(iii) the policy charges fees on the first 24 months of contributions, which you pay for the remainder of the policy (30 years) irrespective of whether you lower or stop your premiums. This was never explained to me.


The broker says he is not responsible, because he is no longer with the company that sold the policy to me. That company happens to be dissolved now. The broker then went on to start his own company 9 months later, based in a different canton.

I am thinking of raising this with the SRO or FINMA. I made initial contact with the SRO and they said they donít have legal authority to do anything.

So my questions are:


1. Do I have a case against the broker? Or is he no longer liable since the company has dissolved?


2. What would it cost to take the broker to court? Can anyone suggest a good lawyer? What jurisdiction would this fall under?


3. I can either leave the CHF 20,000 and maybe make from -2% to 2% a year in returns for the next 25 years, or pay a 75% penalty and invest the CHF 5,000 elsewhere. Some people have said that with the compounding interest on the CHF 5,000 in the long run (25 years) I can end up with more money for retirement. Can anyone share their views on this? Or tell me who I can ask?


Many thanks
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Old 19.02.2018, 12:01
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Re: Legal action for mis-sold expat savings policy

Unlucky, I think we all know the name of the company, insurance savings plans are always crap, the broker & up front fees are usually the first 2 years premiums, hence the low surrender value. Living in CH there is no CGT so there are no tax savings on such plans.

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Hi all,

While living in Switzerland a few years back, a broker sold me an offshore expat savings policy (wonít mention any names in this post).


Key points:

- Before signing, the broker provided an illustrative example of the policy performance showing the fees at 1.5% per year. The policy term is 30 years.

- After a 5 years of negative performance, the policy has lost about 1% of its value. Not a substantial amount, but the funds I was invested in were generating 10% annualised returns.

- The reason for the difference, is because the fees are actually 7% per year. The broker claims that the company managing the policy did not tell him the charges were this high.

- I believe it is negligent for a broker to not know the fees of the policy he is selling.

- Where I am losing money is in the compounding interest, which I need for retirement. If I were to withdraw my funds, I will pay a 75% surrender value and loose CHF 15,000.


The policy documents themselves are very unclear in terms of fees. This is because:

(i) fees are quoted on a per month basis, over different paragraphs without any consolidated summary. The broker should have given me a proper big picture of the fees, which he did not do.

(ii) some of the fund fees are in an investment guide that was never given to me

(iii) the policy charges fees on the first 24 months of contributions, which you pay for the remainder of the policy (30 years) irrespective of whether you lower or stop your premiums. This was never explained to me.


The broker says he is not responsible, because he is no longer with the company that sold the policy to me. That company happens to be dissolved now. The broker then went on to start his own company 9 months later, based in a different canton.

I am thinking of raising this with the SRO or FINMA. I made initial contact with the SRO and they said they donít have legal authority to do anything.

So my questions are:


1. Do I have a case against the broker? Or is he no longer liable since the company has dissolved?


2. What would it cost to take the broker to court? Can anyone suggest a good lawyer? What jurisdiction would this fall under?


3. I can either leave the CHF 20,000 and maybe make from -2% to 2% a year in returns for the next 25 years, or pay a 75% penalty and invest the CHF 5,000 elsewhere. Some people have said that with the compounding interest on the CHF 5,000 in the long run (25 years) I can end up with more money for retirement. Can anyone share their views on this? Or tell me who I can ask?


Many thanks
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Old 19.02.2018, 12:45
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Re: Legal action for mis-sold expat savings policy

You might try writing to Tony Hetherington and/or This Is Money.
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Old 19.02.2018, 13:04
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Re: Legal action for mis-sold expat savings policy

(i) You could also have asked for this if you did not understand it, the data was there. So no problem here.

(ii) Does the contract mention that other papers/rulings are automatically included in the contract? If so, why did you not ask for these? If not what would make these rules to hold up when questioned?

(iii) But is it written in the contract?

(1) Going after an employee of a no longer existing business demands really hard proof of behaviour/acting for which the broker could be held personally responsible even if the company would still exist. Given that the broken acted on behalf of a legal entity no longer existing, this might become very hard to find any compensation here.

(2) Easily thousands, and without knowing the full story and having seen all papers nobody can predict the outcome.

In the end to me it all boils down to: You have a contract with firm X who takes your money and holds your fund, do they calculate costs mentioned in the contract than you could have read this before signing, if they calculate costs not mentioned in the contract than they have no right to do so and such should be reimbursed. Swiss law does not protect you from not reading what you sign, but they do protect you from enforced costs that are not signed for.

Best would be to have somebody who knows what he is reading overviewing your contract and calculate if they charge more costs than what you signed for. If costs are according to the contract you have no case, if costs are exceeding the contractual agreement you have a case towards firm X. So what you probable want is a bookkeeper who can recalculate the costs according to the contract and compare this to the actual withhold costs.
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Old 19.02.2018, 13:51
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Re: Legal action for mis-sold expat savings policy

Of the top of my head there are various points to consider:
- was the insurer permitted to sell the policy in Switzerland?
- what law governs the policy?
- is the repurchase value for the policy adequate (https://www.admin.ch/opc/de/classifi...dex.html#a91)?

A lawyer (or financial advisor) may be able to help but unless you have legal insurance it may be a bit pricy...
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