Intermediaries, Brokers or Financial Service Providers (FSP’s)
Our research indicates that approximately 75% of South African expatriates cash out their own policies by interacting directly with SA banks and insurance companies. The red tape can appear daunting at first glance, and the process can prove challenging without the right info. Regardless, it is your hard-earned money and it should not cost you a fortune to access it.
Expatri8 helps to make it happen: We provide all the administrative tools (process, forms, information) and assistance for expats to cash out their own policies: simple, cheap, safe. In fact, if you do not succeed on the DIY route due to incorrect information, we will return the small fee for our service.
However, for those who are prepared (and able!) to pay the hefty fees, there are several financial service providers (FSP’s, intermediaries, brokers) who are very, very eager to provide a so-called “full service” solution. These operators will fill in the forms for you to sign, and then submit these forms to the various institutions on your behalf. Their selling points are expediency and convenience.
Sounds great, doesn’t it? But (and there is always a BUT):
· The fees are astronomical. Get an upfront quote and decide if it makes sense to pay away 10% or 30% or even more of your hard-earned policy value in costs for something you can quite easily do yourself. And be wary of the pay-later selling point: it does not diminish the amount, their fees may increase during the excercise.
· The convenience factor may be questionable: Yes, they fill in the documents, but you will still need to prepare all the information upfront (the most work involved) and then collate all the supporting documents. And later you will have to read, correct and sign everything, taking full responsibility. You will probably end up spending nearly as much time and effort on this as you would have on going the DIY route.
· Your risk may increase: They will ask you to indemnify them when they take over the relationship between you and your bank or policy company. This aspect needs to be considered very carefully. What happens if something goes wrong? Your bank will refer any problems to the intermediary. Which legal jurisdiction will you be arguing in? Even if they are insured, can you wait 6 – 12 months for their insurance company to pay out? Furthermore, identity fraud is rife; is it prudent to expose your personal financial information (and identity documents and investment statements and signature!) to a large number of non-institutional, non-bank, back-office staff?
· There may be hidden costs: Each bank’s non-resident division still levies their own emigration fees, so will you be paying twice for the same service when you bring in an intermediary? Make sure you understand what will be left of your policy value when it arrives in your foreign bank account, as some intermediaries take a large slice of the foreign currency conversion fees from the banks they work with.
Notwithstanding the above: If your policy value is high enough so that the fee translates into a small percentage, or if your financial affairs are very complex, the Financial Service Providers below may deliver some convenience.
[NOTE: I cannot vouch for any of the operators listed below, I have simply been informed about them by my own clients, or found them on the internet. Do your homework and investigate carefully before proceeding.]
Rand Rescue: www.randrescue.com
This service provider is headquartered in New Zealand, with South African offices in East London and George. Emigration and policy cash-out services are their main business; they offer to act as Financial Intermediary (FSP) with banks and institutions on your behalf.
Rand Tangle: www.randtangle.com
This financial services provider is based in Plettenberg Bay, South Africa. They provide intermediary services in wealth management, foreign exchange services and financial emigration and policy cash-out services. They also assist in emigration and policy cash-out services.
This UK-based company has a regional head office in Johannesburg. Their main business is foreign exchange services and international money transfers for business and for individuals. Financial emigration and policy cash-out is one of the many related services they offer to individuals from SA.
This financial service provider is based in Hermanus, South Africa and has an office in Australia. Emigration and policy cash-out services are their main business; they act as Financial Intermediary with banks and insurance companies on your behalf.
Sable Wealth: www.sableinternational.com
UK-based Sable International is a wealth management service provider with a regional office in Cape Town, South Africa. Their SA office provides emigration and policy cash-out services to expats, acting as financial intermediary on their behalf. Their main business is wealth management.
This financial service provider is based in Hermanus, South Africa. Emigration and policy cash-out services make up their main business. They seem to be a new player in this well-traded niche, but appears to be linked or affiliated to Cashkow (above), which is based at the same location.
The list above is not exhaustive. There are a vast number of smaller foreign exchange service providers who will assist in emigration and policy cash-out services. Investigate, get quotes and decide if it is worth your while going the full service route. It’s your hard-earned savings and the old caveat always apply: there is no free lunch.