RL360 Quantum Savings Plan
RL360 Quantum Savings Review:-
RL360 are based in the Isle of Man, conducting business in Asia, Africa, the Middle East and the UK and they offer the RL360 Quantum Savings plan which is a regular investment savings plan often marketed for education or pension planning.
RL360° is part of the RL360 Group. On 1 December 2015 the RL360 Group acquired CMI Insurance Company Limited (CMI) from Lloyds Banking Group. The addition of CMI creates a combined group with 60,000 policyholders, in excess of $10 billion assets under management and 300 staff located worldwide. It is no longer part of Royal London (the UK group) separating from it several years ago.
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RL360 Quantum Savings Plan
If you are considering a RL360 Quantum Savings Plan then ensure you must keep it running throughout its term to obtain its benefits, and fully understand the local taxation position and weigh any benefits against its lack of flexibility, access and charges which are often not explained. RL360 Quantum Savings can be an expensive option compared with a pure platform plan depending on the adviser you use and supposed tax benefits can be outweighed by charges and lost through penalties. It does not offer a full range of discounted funds, direct equities or trackers to invest in.
Between the first 3 months and 2 years of premiums will be completely lost (penalty) if you attempt to access investments early.
For
- Widely available and sold, with good company rating
- Offers some tax protection in certain jurisdictions
- If kept running to original planned term then may promote savings concept
Against
- No flexibility of full withdrawal or full access in the early years without penalty
- Many countries do not recognise any tax concessions
- Commission wipes out all initial investments made making this an extremely expensive option
- Does not provide full access to lowest cost funds and passive trackers
| Policy Currency: The RL360 Quantum Savings Plan may be denominated in US dollar, GB pound, Hong Kong dollar, Japanese yen or Euro. Benefits will be paid in the plan currency. |
| Why choose the RL360 Quantum Savings Plan: Leading Fund Houses offer a wide choice of investment funds. You choose from over 100 risk-rated funds covering all the major world markets and investment classes. The funds section contains performance statistics which are updated monthly, fund prices which are updated daily and Fund Fact Sheets on each fund. Funds: 150 – 350 funds are available from selected fund managers. Initial unit charge: A charge of 0.50% per month will be deducted from the value of the initial units held within your policy. This charge will be deducted in arrears throughout the premium term. |
| RL360 Quantum Savings Plan promotion: What does RL360 write about their own RL360 Quantum Savings Plan? Quantum is a quality product for those who wish to save for their future regularly but flexibly – perhaps to supplement savings outside of a pension or other tax-advantaged vehicles. It provides the potential to build up cash for substantial future expenditures, such as paying school or university fees, or supplementing income in retirement. |
| Eligibility: RL360 Quantum Savings Plan is a regular premium, whole of life, life assurance contract issued by RL360 Quantum Savings Plan. You can set up a policy in 1 of 7 currencies including Pound sterling (GBP), Euro (EUR), United States dollar (USD) Swiss franc (CHF), Australian dollar (AUD), Hong Kong dollar (HKD) and Japanese yen (JPY) |
| Minimums: You can start saving with as little as USD 320 a month (this can always be increased later). 100% of each premium paid will be allocated to the purchase of units in your policy. For larger premiums, the allocation rate can increase up to 102%. You can pay premiums via a number of different methods including credit card. There is no additional cost if you do choose to pay by card but you will have card charges to consider. The minimum regular premiums for terms of more than 10 years are £200 monthly. The minimum premiums of the RL360 Quantum Savings Plan for terms of less than 10 years is £400. The payment term is selected at outset for a minimum of five years although contributions may be continued after this time. It will accept top ups- minimum £5,000 |
| Charges: This will depend on the type of RL360 Quantum Savings Plan you take out from RL360. Contract charge: There is an ongoing contract charge of 0.125% of the current fund value, deducted each month in arrears. The charge is applied proportionately across both initial and accumulation units. Policy fee: A monthly policy fee will be deducted in arrears from your policy’s accumulation units. During the initial allocation period, the deduction of the policy fee will create negative accumulation units. |
Are charges explicit: By explicit, it means that it is clear to see not only the charges for taking out the plan but also the cost of funds annually, any upfront fund costs, penalties on access, etc. Yes, in the main the RL360 Quantum Savings Plan charges are clearly shown and any professional should be able to interpret them. We have had feedback from clients though that they find it extremely difficult to interpret charges such as how any early access penalties would be calculated.DocumentsRL360 Quantum Savings Plan Brochure |
| Surrender of the RL360 Quantum Savings Plan: A partial surrender on your RL360 Quantum Savings Plan may be treated as a one-off withdrawal. Further details on how it is treated is available in the relevant brochure. A full encashment results in penalties being applied through surrender charges linked to the term of the policy. In effect this means that on polices with an original term of more than 15 years most, if not all, of the first 18 months-2 years premiums are lost upon surrender. You can surrender your policy at any time, but during the premium term it will be subject to a surrender charge and you may get back less than your premiums paid. If you surrender your policy whilst your original premium is still within its initial allocation period, your policy will have no surrender value – in effect suffering a 100% surrender charge. A policy or sub-policy surrendered after the initial allocation period, but during the premium term, will be subject to a surrender charge equal to a percentage of the initial unit value. The charge depends on the period of time remaining between the date of surrender and the end of the premium term. For example, if you select a 15 year premium term and opt to surrender the policy after 10 years, you would have 5 years remaining and the initial units within your policy would be subject to a 34% charge. It is important to be aware that the RL360 Quantum Savings Plan is a long term savings plan, if you decided to cancel the plan early you could lose a large proportion of the money you have saved, we have heard that as much as 50% of the value of the plan value can be lost by surrendering the RL360 Quantum Savings Plan early, or indeed in the first year or so it is not unusual to get nothing back. |
Expat Money Expert Assessment of the RL360 Quantum Savings Plan
A predominantly commission-based adviser’s product with limited use or appeal.
The RL360 Quantum Savings Plan is similar to many in the offshore market place. Similar to the Generali Vision plan this type of plan may have been a common option in the UK back in the 1990s but in 2016 it lacks the transparency of the latest plans available from territories such as the UK, the USA and parts of Europe; ultimately, the RL360 Quantum Savings Plan is an expensive option when compared with a pure platform plan.
The standard RL360 Quantum Savings Plan funds have high ongoing fees when directly compared to platform or direct offerings from fund houses via the UK or the USA. The RL360 Quantum Savings Plan can have high charges on early access. You may not get back all of your savings with an RL360 Quantum Savings Plan and there are no guarantees that the portfolio will give you the returns you are expecting, but any attempt to take proceeds early in the plans life, or make it paid up, will result in access penalties or higher charges on the remaining invested funds, or both.
However, some people require help when making disciplined decisions and will welcome the fact that a plan is written to a set target date and cannot be accessed early without a surrender penalty; some people wish to deliberately lock-up their funds. Therefore, potential investors have to weigh up the benefits of locking up their investments and not having the flexibility to access their investment earlier without surrender charges applied.
NOTE: The RL360 Quantum Savings Plan provides the option of lump sum commission to its distributors (in the industry this is called indemnified or up-front commission) and it has a successful network of distributing agents throughout the world excluding the main regulated territories. The amount the distributor earns is linked to the length of the policy; the longer the policy term the longer the surrender penalty incurred on early access, the more money the distributor or adviser earns. Not all distributing agents have regulation or financial qualifications and may not be aware of the other saving plan options available.
WARNING: Costs and information is correct as of July 2016. Please refer to a brochure from the company for current up to date information and any changes on costs or information. You should not buy based purely on information contained within this article and EME do not accept liability for purchases. If you have any doubts then please speak with your financial adviser or a representative of the company for further advice.
If the provider improves or amends its terms then EME would like to hear from them to amend the review page accordingly, and providers are encouraged to comment on errors or omissions to ensure that readers have the latest and correct information.
Comments 27
@TN – Unfortunately with contractual savings plans, the longer the product is contracted for, the higher the restrictions and potential financial loss for early surrender. Your appraisal of the product is pretty accurate and were created with the benefit of the institution and adviser in mind, not the customer.
There are lots of low-cost funds options available, without entrance or exit fees and with low expense ratios. Of course, if you have time to educate yourself and invest without an adviser there are fees to be saved. That said however, for those who do not have time to educate themselves and would prefer to receive guidance, a good adviser will always work with the customer, use a low-cost platform and implement mutually beneficial advice charges that are eclipsed by the value they add, especially during times of volatility when investors seek comfort and guidance as to the best way forward. Product research and gaining financial expertise is extremely time-consuming, so every investor should make a comparison of paying a fee for an advisor against committing their own time to educating themselves. Thank you for your input.
High fees, low returns, questionable contractual terms
I am an expat with some investing experience, but taxes and investing from abroad can be a bit complicated. I wanted to find a financial advisor to help me plan for my future.
I signed up for a 25-year quantum plan from RL360 recommended by a local financial advisor. After a few years, I noticed something odd. The funds I held were performing well, but the returns reflected in my account seemed very low. It turns out that the fees were eating away a ton of my money. I was ready to cancel after calculating how much money would go to fees over 25 years. I was quite angry; my advisor had mentioned that the fees were relatively low.
The red flags are easy to see in hindsight. The advisor barely glanced at my ETF/Stock portfolio. He wanted to sell that quantum plan. The worst things however are the long yearly commitment and early surrender penalty. At the time, I just didn’t see how one-sided and unfair it was. This only benefits RL360, and pressures customers who are considering cancelling. If you wish to cancel, you must choose between paying a high early surrender penalty or continue paying high investing fees. How this is legal, I don’t know. Does an index fund make you pay an early exit fee? No.
My early surrender penalty was around $10,000 USD. I feel scammed out of this money by a “financial advisor” who I know was paid up front for getting me to sign up. I believe that RL360’s investment products are sub-par at best and their sales practices are questionable. Ask an “advisor” selling one of these products if they would invest their own money into one. If they answer “yes”, leave the meeting.
I have enjoyed much better returns managing my own portfolio over 12 years. Taxes aren’t all that difficult either. Educate yourself, and you’ll be fine. There are many other options and don’t let an “advisor” tell you otherwise. Signing up for the RL360 quantum policy was the worst financial decision I have ever made in my life, but cancelling the policy was my best. I will tell any expat interested in investing to avoid RL360 and look for better options.
This is unbelievable
@Neil – Sadly, it is easy to be misled by reading glossy product brochures and speaking with salesmen, who are highly motivated to sell these products owing to the incentives on offer. Autocall structured products can also be purchased within the PIMS structure which offshore, can also provide the adviser with an additional commission which often does not have to be disclosed. There are alternative options available to minimise the damage and restructure your portfolio to return to profitability. One of our advisers will be in touch soon to see if we can assist.
I was unfortunate enough to fall for investing in a PIMS, and when I understood the level of incredible charges I was paying it was too late. I took off most of what I had but the charges are linked to the original amount so eroding what I have left in there to cover this.
On top of that I was convinced by the adviser to purchase an autocallable note so to get a return to cover the charges so I am now exposed to lose a lot if the market turn negative at the exercise time of the note. On top of that you are charged like a bank negative interest on some currency and if oyu buy shares from them you cannot even decide the maxim price for the purchase. Also yo get double charged as RL360 uses another company to make the share purchase. Of course they blame the adviser although they are very happy to combine with them selling at these expensive rates.
I think laws should be introduced to allow investors in these obviously out of market charges to renegotiate fees and contract on bona fide market practices.
I would second some of the comments made above. I bought this product in Japan from a “financial adviser” who clearly didn’t have my interests in mind. When it became clear 2 years into a 25 year plan that I was throwing a couple of thousand dollars a month away, I had to cut my losses and start investing elsewhere. It was a tough decision at the time, but clearly the right one. I would advise anyone to be very careful with this type of product. As far as I can see, all of the purported benefits of these products can be replicated elsewhere more cheaply and flexibly. If you’re a short term expat, you can probably still access pay into you home country saving / retirement / investment accounts for a period after you relocate (and in some cases with the same tax benefits). If longer term, you need to explore options in the country you are located. This may be tiresome and language may prove problematic, but these RL360 type products are not the answer.
@GP – The policy fees are extremely high and the commissions are effectively funded by the premiums paid in the first 18-24 months, hence why the exit fees are so damaging. With the limited fund range on offer through RL360 compared against the clean share classes available through alternative platforms, it may well be possible to recover much of the lost performance through much lower fund and product costs.
I’m an Australian expat living in Indonesia, and was sold on the Quantum RL360 savings plan by an advisor from Singapore. The advisor was adamant I should take out a policy, citing diversification of my portfolio, even though I insisted I had great Australian Superannuation plan achieving 8%-12% and my own direct share investments on Australian ASX. Well what a disaster to have RL360, probably not as bad as other people as I’m finding out. I’m exactly 5 years into a 15 year plan, contributing $500 AUD per month = $30,000 in total invested to date. Having access to my portfolio on-line, I have been able to go back through the history of my investment, and never once have I ever been at ‘break even’ on my premiums deducted. Further, when I analyse the fees, they are coming out at a whopping $85 per month from $500 contributed. As a positive, the investment choices across x 3 funds, have combined actually been doing ok, but any gains completely eaten up by these ridiculous fees. On the anniversary of your policy each month, the fees come out, dropping further your principal invested as the ‘units purchased’ drop back. I have been consistently running at -3% return… sounds amazing after 5 years!!!. So based on my plan, if I exit now, I’ll receive circa $25K AUD, given my $30K investment, because of the ‘surrender penalty’. If I stay to the end, for some bonus – I think is circa 3.75%, I still don’t think I’ll have enough ‘headroom in return’ to offset the fees… basically if I stay in the plan for 15 years, the fees = $15,000 AUD !!!! (180mths x $85 per mth fees) from a $90,000 in total investment. Its like 16% of the total premiums? Its crazzzzzyyyyy…. I think it’s better I exit, loose circa $5K now and then reinvest the $25K myself..These products should be outlawed….
Everything is very open with a clear explanation of the issues.
It was really informative. Your site is very helpful.
Thanks for sharing!
You can try, but in our experience it will waste your time and money!
Is there any way to take legal action against this company for facilitating conmen to promote their products.
@Huw Phillips – Sorry but we had to remove the name of the adviser. We remove all names of specific advisers, both where they are praised and also when complained about.
I too found Andrew Hallams website and after reading about these toxic policies persuaded my wife to cancel her ten year plan after two years. We have now invested in low cost index funds via advise from XXXXXXXX ( one of the good guys). If you have a policy with RL360 and are reading this cancel it as quickly as you can. Take the hit on the losses and contact XXXXXXXX to get you back on track with your investments.
RL 360 fees run at at least 7.5 % per annum (0.5 % monthly fee plus 1.5 % annual fee) so there is no way you will make any money on your investments. If you take a payment holiday you will still pay monthly fees so your investment will be whittled away.
Be warned. These people are only out to make money for themselves, in particular the salesmen who sell you the policy. Don’t give them the qudos of calling them financial advisers, they’re not. Some of them have no formal qualifications or training in financial matters, they are just selling a product and earning huge commissions from them.
Thank you for your feedback and comment – please comment as much as you like.
I really like reading an article that can make men and women think.
Also, many thanks for allowing me to comment!
While Vanguard funds charge only 0.2% FEES or less, they are only accessible to US citizens.
The best way for non US citizens is to invest with Schwab International or Fidelity International.
Having said that- for non US citizens these platforms do offer the same International funds as those offered in RL and RS , but they do charge same 2-3% fee- hence there is no significant benefit. Their US based mutual funds again are off limits to us. However they do have ETF’s which i think have low cost of less than 0.2% as well. This final option is probably the best bet for us.
The problem with RSK and RL is their lack of transparency in dealings and about fees. Now, in this technology driven world of finance , their products, fees, use of middle men, ambiguity of charges is a loosing proposition for any investor.
The reason the chap who sold you the plan doesn’t’ want you to do anything for two years is because he gets 100% of his commission if you remain in the fund for 2 years.
I have recently attended a seminar with Andrew Hallam, an ex-teacher who now makes it his mission to advise ex-pat teachers on options for investment. He does not tell you what companies to go with but will recommend some who charge 1% and less. Although he advises setting up your own trading company for a nominal fee, less than 0.2% and investing your own money.
I have just opened an account with Guardian International and thankfully only paid in two months. I have now cancelled the plan and will simply suck up the 2k loss and put it down to my bad decision and start up on my own investing in index funds.
Also got sold a 23 year plan but wish I had bothered to google them earlier. Ended up dumping the policy and losing 6 months contributions as it worked out cheaper to do that than lose 82% of 23 months contributions if you try to draw after the initial allocation period.
I also bought one of these for 25 years. Again, I was told a similar story about it being easy to get my money out after the initial two year period. It seems this is not the case. Has anyone found the best way to recover the maximum money out so it can be reinvested elsewhere?
Thanks a lot! It is definitely an great web site!
I would not touch this. I would give it one star if being generous
I took out a ten-year plan with RL, and yes, I was told that it is a long term policy, but after 18 months it is still worth less than the amount I paid in. I would have been better placed leaving my money in a biscuit tin under the bed!
More worryingly, this is a VERY inflexible plan – I committed to $5000 per month for 10 years, and if circumstances change (e.g. I lose my job, or the company goes bust), and I have to close the account before the end of the term, the penalty payments could be as much as $50,000. Even if I just reduce the amount I pay in each month, the fees (and the penalty for early redemption) is related to the initial amount saved each month, while the returns are related to the new monthly payment.
While I accept that pension funds incur costs for managing and administering policies, the cost are related to the complexity of the process, not the amount saved. So why, then, are the fees for saving $5000 per month ten times the fees for saving $500 per month, when the work involved is almost no different?
I took one out for 5 years, even though I was pressured into considering longer. I am almost at the end and was thinking about whether to extend it, or to take out a new one. Having read this i am pleased that i only did 5 years. I have to say until recently the performance looked good, but with what is currently happeneing to markets I do not want to access it yet. What are my options?
I was sold an RL360 Quantum Savings Plan with a 25 year term, and I was told I would have easy access to my savings after the first 2 years. 4 years after I started the plan, I lost my job and then I found out I would get hardly anything back. The guy that sold me the plan has gone back to England due to some “family problem” and I was left to try a deal with the company that he had worked for, it was a nightmare, I would not get one of these plans again under any circumstances
I can see that you are seeking to put a balanced view on this product out. Well written maybe and no-one can accuse you of bias, but honestly if I had the chance to get my hands on the so called adviser who sold me this ‘education savings plan’ I would not be unbiased. Lost all my money virtually after 3 years of saving and put my kids in a terrible position as no longer had the funds to put them through school. These firms and products should be banned.
I bought one of these plans after a chap called me out of the blue last year, the brochure seemed to be ok and I am currently saving $500 a month. I have not tried to do anything with the plan at this stage, but the adviser did say it was important that I did not change the payments for the first 2 years. After reading the review above, I will speak with my adviser. I think this is an interesting article, although now I wished I had seen this before I took the plunge.