UAE worst in world for predatory expat financial advisors

According to an expert investor and author whose life mission is protecting expats from fraudulent IFAs, the UAE is the world’s worst for risky investment mis-selling.

In a round table discussion organised by the National English-language newspaper, Andrew Hallam compared the UAE’s market for long-term pension savings plans to America’s historic Wild West where crooks lurked around every corner. The discussion was a response to the massive number of complaints from the region as regards savings plans and the sales methods used. Six financial services industry representatives also attended the discussion.

The high number of complaints in the UAE has already caused the UAE’s Insurance Authority to bring in strong new regulations aimed at restricting and changing the way savings plans and insurance-related investments are allowed to operate. The majority of younger expat professionals working in the region are earning far more than ever before and are easy prey for unscrupulous IFAs as they tend to be naive about the financial industry and its investment products in general. Most expats contact brokers or IFAs, and many wish they hadn’t in very short order, especially if they change their minds or, worse still, their circumstances change.

The vast majority of IFAs in the UAE are anything but impartial, as they make a great deal of money from commissions as well as sales of unsuitable or risky investments. Many younger investors have found themselves locked into payments they’re unable to afford, especially if they’re unlucky enough to lose their jobs in the UAE’s increasingly unstable working environment. Another problem with investments and savings plans touted in the UAE is that they’re amongst the most expensive on the planet as regards charges, commissions and fees, all of which are the responsibility of the saver and which can reduce and often lose the promised profits of a plan.

Hallam believes in financial education as the solution for being scammed, with the only alternative finding a paid and totally trustworthy advisor who doesn’t get his wages from commissions or other so-called incentives to sell unsuitable products to unsuspecting clients.