Friends Reserve Bond Review

Adam Fayed
4 min readJun 18, 2019


(Quick note; for a more in-depth review of Friends Provident and similar savings plans, alongside customer reviews and questions at the bottom of the page, please visit here

Who are Friends Provident?

Friends Provident are a life insurance company, with product offerings in areas such as life cover, savings plans and lump sum. The Premier Advance Savings Plan is a regular contribution. Friends Provident have been bought by Aviva recently, so have rebranded.

Where is Friends Provident sold?

They are sold worldwide in Dubai, Qatar, Hong Kong, Singapore, Malaysia, China and other expat destinations. Friends Provident was more widely sold 5–10 years ago, compared to today. So most people in the plan, have already contributed for a number of years.

What are the fees and general terms and conditions?

There are flat fees of $6 per month, fund fees (this depends on which funds are picked) and 1.5% per quarter charges on your initial units. There are also numerous hidden fees.

Most customers sign up for 5–25 years and typically the initial period is 18 months, meaning that you need to contribute to 18 months to avoid losing 100% of your money. After the 18 months has ended, you can withdraw some money without penalty, decrease or increase your payment.

However, doing so has a number of complications, including;

  1. Failure to get bonuses. Many of the bonuses aren’t available unless you contribute every time. In other words, if you have a 10-year plan, and you contribute for 120 months, you will get a reasonably sized bonus at the end. If you contribute for 119 months or less, you will forfeit some of those bonuses.
  2. The original charging structure is based on the premium you picked on day 1. So if you start with a $2,000 premium and reduce to $500, your charging structure will still be based on $2,000, meaning that the plan would become much more expensive on $500

As a result of these two factors, the only people who can make reasonable gains from the plan are those that contribute every time, but few people keep up with payments (statistically speaking about 3% of people who contribute to a 25-year plan).

The plans get more expensive in years 5, 6, 7, 8 and 9. Many customers see good returns in years 1 and 2, due to the welcome bonuses, but see weaker returns after year 5.

What’re the positives about the plan?

  1. You can earn more than in the bank if you contribute every single month until the end
  2. It is an established brand, so you won’t lose your money. It is safe from that point of view.
  3. Just like all offshore investing, there are significant tax advantages, but these advantages can be gained in cheaper structures.

What are the negatives about the plan?

1. The fees are very high. Up to 4%-5% if you include direct and indirect fees. These fees are only mitigated by the bonuses if you contribute each time

2. The plan isn’t as flexible as it seems on paper. You can reduce your premium, and take premium holidays, but this comes with ramifications.

Are there charges for getting out of this product?

Yes, there are. The longer you sign up for, the higher the charges for getting out will be.

If there are charges for getting out of the product, what can you do?

It depends on each case. In some cases, fund changes within the existing product make sense, if you have contributed every month.

In many cases, you can do a maximum penalty free surrender. For example, if you have $100,000 in your account, you can withdraw $50,000 or $70,000 without penalty, and invest in a cheaper alternative.

How high this maximum penalty free surrender usually depends on how long you have been invested in the account.

On day 1, you often have $0 penalty free surrenders available, especially on the savings plans. Most savings plans have a 1–2 year initial period. If you fail to pay in for this period, you lose all your money.

After that initial period, your surrender value gradually increases. So on a 25-year plan, for example, after 5 years, your surrender value may be 20%-30% of the account value. After 22 years, your surrender value may be 95% or more, but the specifics depend on the offshore life insurance provider.

However, over time, the amount you can withdraw penalty free increases.

Mistakes to avoid

In investing one of the biggest mistakes investors makes is called loss aversion in cognitive psychology. This means that if investors are down, or not doing well, they wait until the accounts are breaking even before selling.

A simple example would be if you have $100,000 in your account. The value is $95,000. After more reading, you know that deep down the fees are eating into returns. However, as the account briefly hit $101,000 before, you wait until the account recovers to $100,000+ before selling as you don’t want a loss.

I have even seen investors wait 2–10 years to avoid this loss. The rational thing to do is accept the $5000 loss in this situation, as that money can be made up quickly in a cheaper structure.

In addition to that, many investors think size is always good. Having 24/7 account access and log in, flash IT systems and an office in Mayfair doesn’t help client returns; lower fees and better funds would help that.

What can you do if you have a Friends Provident policy offshore?

If you have a policy and would like a conversation please contact me via, I can’t promise anything — only to try my best.