When Sebastien Aguilar first arrived in the UAE six years ago, he says he made the same mistake that many others do.
After thoroughly researching the market and carefully selecting a financial adviser, he signed up for a fixed-term savings plan on the back of their advice.
It wasn’t tailored to my needs and actually locked me in for 10 years in my case with relative inflexibility, says Mr Aguilar, 31, a consultant in energy management from Belgium.
My contribution was US$815 [per month] but my fees were up to 4 per cent on average annually, and that is huge really. Thankfully I wasn’t investing everything. It was just part of my savings. So I looked at other options.
And that is when he realised he didn’t need a financial adviser at all. Reading investing sites online and information in books taught him all he felt he needed to know about going it alone.
Mr Aguilar is part of a growing group of people who are adopting a do-it-yourself approach to their personal finances as they reject the costly fixed-term investment and savings plans sold by financial advisers.
The National hosted a roundtable this month to discuss whether fixed-term savings plans are providing any benefit to those who buy them and sell them amid an alarming amount of complaints from policyholders, according to the UAE’s Insurance Authority, which is bringing in new regulations to protect consumers.
Mr Aguilar, who welcomes the new regulations, says he soon realised many people were in the same situation as himself.
No one was really sharing this knowledge with everyone. It is not something we talk about at school. We don’t talk about this with family, he says. I started just explaining this to my friends, my colleagues at work. And then the more I was talking about it the more I realised this is something people should know about.
Through his research, Mr Aguilar stumbled upon a forum about Bogleheads, an investing philosophy that follows principles established by Jack Bogle, the founder of Vanguard, one of the world’s largest investment companies. He promotes low-cost, conservative index funds and encourages people to buy and hold their investments long-term.
Bogleheads is a global community really that follows the principles of passive investment, says Dorota Lewna, 33, from Poland, Mr Aguilar’s fiancée.
There is a whole strategy involved in that, but it is basically about investing through discounted brokers as cheaply as possible, so lowering the fees as much as you can. When you look at the local retirement plans that are offered, they are usually based on about 2 or 3 per cent in fees. We are trying to keep the funds below 1 per cent and preferably about 0.5 per cent. These are usually index funds, so they are not actively managed by fund managers but they are run by computers and they are basically reflecting the market average indices.
Mr Aguilar spotted a message left on the international Bogleheads forum by Jennifer Lincoln, 32, from the United States, a fellow Boglehead advocate, in 2014 asking if anyone in the UAE was interested in meeting up and forming their own chapter. He said he was, and the UAE Bogleheads Common Sense Personal Finance and Investing group was born about two-and-a-half years ago.
Ms Lincoln, who still lives in Dubai, says it quickly became clear Mr Aguilar had a lot of enthusiasm for the subject, so she asked him to join her in running the group.
I am very lucky and persons involved in Bogleheads UAE are very lucky to have Sebastien, as he is a master organiser who has intense enthusiasm for the group and its cause, she adds.
After thoroughly researching the market and carefully selecting a financial adviser, he signed up for a fixed-term savings plan on the back of their advice.
It wasn’t tailored to my needs and actually locked me in for 10 years in my case with relative inflexibility, says Mr Aguilar, 31, a consultant in energy management from Belgium.
My contribution was US$815 [per month] but my fees were up to 4 per cent on average annually, and that is huge really. Thankfully I wasn’t investing everything. It was just part of my savings. So I looked at other options.
And that is when he realised he didn’t need a financial adviser at all. Reading investing sites online and information in books taught him all he felt he needed to know about going it alone.
Mr Aguilar is part of a growing group of people who are adopting a do-it-yourself approach to their personal finances as they reject the costly fixed-term investment and savings plans sold by financial advisers.
The National hosted a roundtable this month to discuss whether fixed-term savings plans are providing any benefit to those who buy them and sell them amid an alarming amount of complaints from policyholders, according to the UAE’s Insurance Authority, which is bringing in new regulations to protect consumers.
Mr Aguilar, who welcomes the new regulations, says he soon realised many people were in the same situation as himself.
No one was really sharing this knowledge with everyone. It is not something we talk about at school. We don’t talk about this with family, he says. I started just explaining this to my friends, my colleagues at work. And then the more I was talking about it the more I realised this is something people should know about.
Through his research, Mr Aguilar stumbled upon a forum about Bogleheads, an investing philosophy that follows principles established by Jack Bogle, the founder of Vanguard, one of the world’s largest investment companies. He promotes low-cost, conservative index funds and encourages people to buy and hold their investments long-term.
Bogleheads is a global community really that follows the principles of passive investment, says Dorota Lewna, 33, from Poland, Mr Aguilar’s fiancée.
There is a whole strategy involved in that, but it is basically about investing through discounted brokers as cheaply as possible, so lowering the fees as much as you can. When you look at the local retirement plans that are offered, they are usually based on about 2 or 3 per cent in fees. We are trying to keep the funds below 1 per cent and preferably about 0.5 per cent. These are usually index funds, so they are not actively managed by fund managers but they are run by computers and they are basically reflecting the market average indices.
Mr Aguilar spotted a message left on the international Bogleheads forum by Jennifer Lincoln, 32, from the United States, a fellow Boglehead advocate, in 2014 asking if anyone in the UAE was interested in meeting up and forming their own chapter. He said he was, and the UAE Bogleheads Common Sense Personal Finance and Investing group was born about two-and-a-half years ago.
Ms Lincoln, who still lives in Dubai, says it quickly became clear Mr Aguilar had a lot of enthusiasm for the subject, so she asked him to join her in running the group.
I am very lucky and persons involved in Bogleheads UAE are very lucky to have Sebastien, as he is a master organiser who has intense enthusiasm for the group and its cause, she adds.
