The offshore space is littered with ‘orphan clients’. But what is an orphan client? Aviva, the UK insurer, says it is someone who hasn’t had contact with an Advisor for five years.
That, I believe, is too restrictive. There are any number of African offshore clients who can be properly called orphan clients, and the reasons are many.
- The Advisor is here today, you start a regular savings plan or make a lump-sum investment with him – and he’s gone the next, not to be found ever again.
- The saver stops his regular plan through lack of understanding, lack of contact, poor performance of the product, lack of confidence in the Advisor and is abandoned to his fate.
- The Advisor trips into Zambia or elsewhere from somewhere abroad, and never returns. There is contact after the sale, but the investor feels uncared for, that there is a lack of interest, and the whole arrangement leaks away into the sands of disappointment.
- As a result, there are countless Africans with small to large pots of money which are not being managed in any way at all, the client feels burned and avoids making any further investments towards his family’s longer-term financial well-being.
Finding a quality, regulated Advisor can benefit disappointed or unhappy African offshore clients in several ways:
- Getting your financial planning back on track is the first. You bought the offshore product for a reason, and you still have that planning goal, but need professional help with the investment planning required to help you reach it.
- Recover, where possible, value. A regulated Advisor can take on the management of the investment and advise on how to make the best of the wreckage, to recover value and performance.
- Get lower charges on the investment. According to the FCA in London, there are over 400,000 orphan clients in Britain with over £10bn of assets on platforms. Orphan clients are often stuck with high on-going charges, often in an inappropriate product. "In some cases”, said the FCA, “we saw fees for new investors that were a fifth of those being paid by long-standing clients."
- Completely re-position the existing investment. In some cases, it makes sense to cash in the existing investment and place it elsewhere. This should only be done after a detailed examination of the costs of surrendering the original investment and re-investing it elsewhere, against the costs of continuing to hold a failed investment. Caravel Partners is interested in hearing from African “orphan clients” who hold offshore investments with which they are unhappy or disappointed, or where the original Advisors have lost your trust or have disappeared.