AES International, an advisory firm focused on UK expatriates with a major presence in the Middle East, said it has seen a “twelvefold” rise in inquires from consumers interested in taking advantage of a free service it offers that promises to expose hidden commissions and assign risk ratings to investment products, compared with the same point a year ago.
AES’s so-called “X-ray reports” service was initially offered through the company’s website in 2015, as a way for international investors to find out any hidden commissions that were paid to an adviser from the product provider or the investment provider.
The X-ray report service also, the company says, measures the “true level of risk” within a given portfolio, “check[s] how funds have performed against their benchmark, assess[es] if investments are properly diversified, see[s] if a client was left exposed to tax and hidden charges, and uncover[s] the lock-in periods which reduce flexibility and performance”.
Sam Instone, pictured, chief executive of AES, said the company was surprised at how many inquiries the firm had received in the first quarter of 2016, and noted that it was probably due to a growing awareness of the hidden costs issue among expatriates. He didn’t say exactly how many inquiries had been received, this year or last year.
He said: “We have been quite taken aback in the first quarter of 2016 by this massive surge in demand for a truthful, fully transparent assessment of individual investments. The unfortunate fact is that many financial companies operate in high pressure sales environments with tough targets, so they don’t always have their customers’ best interests at heart. This can lead to an unscrupulous and quite aggressive approach to selling – and I think the knock-on effect is what we are seeing now, with this huge increase in demand for [our] X-ray service.”
He added that although the UAE, where many of AES International’s clients are, has implemented many consumer protection laws in place over recent years, investment schemes administered by certain insurance companies and sold by other advisory firms are continuing to make use of hidden commissions.
One tip AES always offers, Instone noted, is that professional advisers “don’t cold call”.
AES International was established in 2004 and currently operates out of seven offices internationally, with licences in some 65 licences held in 35 different jurisdictions.