Ask an international adviser how they are paid and watch what happens. A fee-only firm answers in one sentence. A commission firm explains that "the provider pays us, so the advice is free to you". Advice is never free. It is either priced or hidden.
What the hidden price looks like
The classic expat product is a regular-premium offshore investment bond with a fixed term — often 20 or 25 years. The adviser is paid an indemnity commission up front, calculated on the total premiums you have promised over the whole term. On a $2,000-a-month, 25-year plan, that is a commission funded by roughly the first 18 to 24 months of your contributions.
The consequences are structural, not accidental:
- Early-exit penalties that can exceed 50% of value in the first years, because the provider has to claw back the commission it advanced.
- Layered charges — establishment charge, policy fee, mirror-fund charge, underlying fund charge — that routinely total 3.5%-4.5% a year.
- Product bias. Nothing about your circumstances is improved by a 25-year lock-in, but the commission is.
Compounded over 20 years, a 3% total cost against a 0.6% alternative consumes roughly a third to two-fifths of the terminal value. That is not a rounding error; it is the difference between retiring at 58 and retiring at 65.
The regulatory picture is uneven
The UK banned commission on investment advice in 2013 and on pension advice thereafter. The EU tightened disclosure under MiFID II. But the offshore market that serves internationally mobile clients — parts of the Gulf, Asia and the Caribbean — never received an equivalent reform. The same products that disappeared from the UK high street are still sold, energetically, to expatriates.
What fee-only actually means here
Our wealth work is charged in one of two ways: a fixed fee for a defined piece of advice, or a transparent percentage of assets under advice for ongoing management. We receive nothing from any platform, fund manager, insurer or scheme trustee. If a product pays a rebate, it is credited to your account, not ours.
That has three practical effects.
We can recommend doing nothing. A large share of our recommendations are "keep the existing arrangement and stop paying for a review". A commission firm cannot afford that answer.
The investment universe opens. Without a commission requirement, the sensible core of most portfolios is index funds and ETFs at single-digit basis points, on an open-architecture platform you can leave at any time.
Exit is always possible. Every arrangement we recommend can be transferred or terminated without penalty. Portability is a design requirement, not a feature.
Questions worth asking any adviser
- What is your total annual cost to me, in pounds or dollars, on my portfolio size?
- Do you or your firm receive anything from the provider — including trail, override or "marketing support"?
- What is the exit penalty in year three?
- Who is the regulator, and can I verify the licence?
- If your recommendation is unchanged from last year, what am I paying for?
A good adviser answers all five without hesitating. If the answers arrive slowly, that is the answer.
