How a UAE-based expat discovered his pension had been restructured without his knowledge, the adviser behind it held no valid licence, and what it took to rebuild from the ground up.
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*Details have been anonymised and certain figures may have been adjusted to protect client confidentiality.
PENSION VALUE
£600k
Under management
DAY-ONE UPFRONT CHARGE
£48k
Day-one upfront charge
5-YEAR RETURN (GSB BENCHMARK)
70%+
Evidence-based equity portfolio
Figures shown are illustrative and based on the specific client scenario outlined. Performance shown is based on GSB model portfolio benchmarks, with the 5-year return shown as at April 2026, and does not represent the return of any individual client account.
Written by Mauro De Santis Bo, Senior Partner at GSB.
How it started
It was not a scheduled meeting. There was no pitch, no referral, no LinkedIn message. It was a conversation over dinner following a family funeral, the kind of moment when the ordinary business of life pauses and people tend to talk more openly than usual.
A guest mentioned, almost in passing, that his pension was being managed by an adviser in Dubai. That caught my attention. The financial services industry here is not large. The regulated, reputable players tend to know each other. The name he gave me was not one I recognised.
I offered to take a look, if he could send over whatever documents he had. A week later, what arrived told a story I have unfortunately seen before.
FIRST RED FLAG
He had no online access to his pension, no recent valuation, and when he asked his adviser directly, he was told the policy was ‘in the process of being transferred between firms’ and a valuation could not be provided. From the client’s perspective, there was insufficient transparency regarding where pension assets were held and how they were being managed.
Investigating the adviser
Before reviewing the pension itself, we looked into the regulatory status of the person managing it. What we found raised a number of concerns.
The adviser was operating from a company registered in Media City, Dubai. A UAE free zone trade license alone does not constitute financial advisory authorization. In practical terms, we could not identify any valid regulatory authorisation for this individual to provide financial advice from within the UAE either under the DFSA, SCA, FSRA or other regulatory bodies.
To generate income and manage the client’s UK pension, the adviser was routing activity through a Mauritius-registered partnership company, using a change of agency on the UK Self Invested Personal Pension (SIPP) structure to gain access to the policy. Structures of this kind are often associated with commission-based remuneration models that sit outside standard regulatory oversight.
REGULATORY NOTE
Any adviser providing financial advice to UAE residents is required to hold a valid licence from the relevant UAE regulatory authority, depending on the jurisdiction where they operate from. Operating without the appropriate licence can expose clients to significant risk. and can leave them with very limited recourse if things go wrong.
What was inside the pension
Once we obtained Letters of Authority and secured a proper, up-to-date valuation, we were able to review the structure in full. Peter (not his real name) had a pension worth approximately £600,000 built from several previous UK workplace pensions, consolidated into a single SIPP. On the surface, that consolidation is sensible. The problems were entirely in the execution.
The bond-inside-a-pension structure
In simple terms, an additional layer had been added inside the pension that increased costs and restricted flexibility, without providing a clear benefit to the client.
The first and most significant issue was the use of an RL360 investment bond placed inside the SIPP wrapper. To be clear: offshore investment bonds are legitimate financial planning tools. For clients living in a taxable jurisdiction, they can offer genuine tax efficiency by deferring income and gains within a clean, well-structured arrangement. Used correctly, they have a place in a properly constructed financial plan.
The problem here was not the product itself. It was the context. A SIPP is already a tax-efficient wrapper. You do not need another tax-efficient wrapper inside a tax-efficient wrapper.
In practice, this structure resulted in a significant upfront commission being applied on the transfer of pension funds into the bond, alongside ongoing costs that were not clearly understood by the client at the time.
The bond was set to run for ten years. Peter was already within pension minimum access age. If he needed to draw from his pension before the bond matured, he would face surrender penalties. His own money was, in effect, locked away from him.
COMMISSION CALCULATION
Based on standard RL360 commission structures at the time, the upfront charge to the policy was approximately 8%, equating to around £48,000 on a £600,000 transfer. This figure is based on the structure of the product and the charges visible within the policy documentation
Performance: five years of lost ground
The bond had been in place since 2021. Over five years, the portfolio returned 14.3%. During the same period, the GSB 100% equity benchmark returned over 70% (which reflects a materially different risk profile and is provided for illustrative comparison only). While different portfolios carry different levels of risk, this gap reflects the combined impact of high charges, poor construction, and structural inefficiencies. This gap is not explained by market conditions alone, it reflects a combination of high charges, poor construction, and a structure that was never designed with the client’s outcomes in mind.
TOTAL ONGOING COST
When all layers were combined, the platform charge, the bond wrapper fees, the investment fund costs, and the adviser’s 1% ongoing management fee, Peter was paying over 3.5% per year. That is before accounting for the £48,000 already taken on day one.
What was wrong with the portfolio itself
Beyond the wrapper structure, the underlying investment choices reflected no coherent strategy. Several issues stood out immediately.
Funds denominated in USD were held inside a GBP pension, creating unnecessary currency drag. A number of ETFs were domiciled in the United States, which creates a potential US estate tax liability for non-US persons holding those assets at death. For a UAE-resident British expat, this is a meaningful and avoidable risk.
The portfolio was 100% in equities, despite Peter describing himself as a cautious to moderate investor. There was no fixed income allocation, no meaningful diversification across global markets, and a heavy concentration in US and UK equities. One structured product appeared inconsistent with the overall portfolio strategy and added an additional layer of cost.
Rebuilding from the ground up
We carried out a full review: financial objectives, attitude to risk, capacity for loss, and a detailed cashflow model looking at when Peter would need to draw from the pension, how much, and across what timeframe. From that foundation, we built a set of recommendations.
BEFORE | AFTER |
Structure SIPP with RL360 bond inside | Structure SIPP, open architecture, no bond |
Equity allocation 100% equities (cautious/moderate client) | Equity allocation 60/40 aligned to risk profile |
Ongoing cost (all-in) 3.50%+ per annum | Ongoing cost (all-in) 1.31% per annum* |
SIPP platform fee Over £600 per year | SIPP platform fee £190 per year |
Portfolio cost Unclear, commission-based structure | Portfolio cost ~0.14% pa (ETF + Dimensional) |
Client visibility No online access | Client visibility Full online access, real-time |
Liquidity Locked for 10-year bond term | Liquidity Fully flexible |
Cost breakdown (after): Platform 0.17% + portfolio funds 0.14% + GSB ongoing advice fee 1.00% = 1.31% per annum in total. Compared to 3.5%+ previously, this represents a saving of over £13,000 per year on a £600,000 pension — every year, compounding forward.
*Figures shown are illustrative and based on the specific client scenario outlined. Actual costs and outcomes will vary depending on individual circumstances, platform selection, and investment choices.
We recommended exiting the RL360 bond, accepting the surrender penalty in full. The ongoing drag of remaining inside that structure for another five years would have cost Peter significantly more than the penalty itself. We moved to a low-cost open architecture SIPP platform, replacing a fee of over £600 per year with one of £190.
The investment portfolio was rebuilt using a globally diversified, evidence-based approach: a combination of low-cost ETFs and Dimensional fund holdings, weighted in line with global market capitalisation. The total investment cost came to approximately 0.14% per year. The portfolio was realigned to a 60/40 equity-bond split, reflecting Peter’s actual risk profile rather than the adviser’s apparent preference for maximum equity exposure.
The cost reduction alone is expected, over time, to help offset the surrender penalty we took to exit. But the more important outcome is that Peter can see his pension, understand it, and access it on his terms.
What this means in practice
Peter now has full online access to his pension. He can see the value, the allocation, and the costs at any point. His total ongoing cost has fallen from over 3.5% to 1.31% per year — that 1.31% includes our ongoing advice fee, the platform, and all underlying fund costs. On a £600,000 pension, that difference alone saves him over £13,000 every year, compounding forward into retirement.
The five-year performance gap between what his pension delivered and what a straightforward evidence-based portfolio would have achieved represents a significant real-world cost. Compounded over the full ten years the bond was designed to run, the impact would have been even greater.
Why this still happens in 2026
The honest answer is that it happens because it can. Expats moving to the UAE are often managing financial complexity across multiple jurisdictions. They are busy, they trust people introduced through their network, and they are not always aware that the regulatory protections they relied upon in the UK do not automatically follow them here.
The commission-based model described in this case study is banned in the UK under Retail Distribution Review (RDR). A DFSA-licensed adviser would be required under Conduct of Business rules to disclose all charges and conflicts of interest. The structure described, including the undisclosed upfront commission, would not have been permissible under those rules. But a person operating without a licence is not bound by those rules in any practical sense. The cost ultimately falls on the client.
We see variations of this situation. The structure changes. The products vary. But the pattern is consistent: a large upfront commission, a restrictive product designed to protect that commission, and a client who had no idea any of this had happened.
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Disclaimer
This case study is based on a real client scenario. Details have been anonymised and certain figures may have been adjusted to protect client confidentiality. It is intended to illustrate the type of financial planning services offered by GSB Capital Ltd and does not constitute financial, investment, tax or legal advice.
Individual outcomes will vary depending on personal circumstances. The situation described may not reflect all aspects of the original case, and the outcome achieved for this client is not representative of results that may be achieved for other clients.
Past performance is not a reliable indicator of future results. The value of investments can fall as well as rise and you may get back less than you invest. Any performance figures referenced, including the GSB 100% equity benchmark, are derived from GSB Capital’s model portfolio returns and are shown for illustrative purposes only. They do not represent the returns of any specific client account, and the GSB benchmark is an internal comparator and does not represent a regulated index or guaranteed return.
Any references to taxation are based on GSB Capital Ltd’s current understanding of applicable laws and regulations in the UAE and the United Kingdom. Tax laws are subject to change and their application will depend on individual circumstances. You should seek independent tax advice before making any financial decisions.
Performance figures are stated as at 29 April 2026 and are subject to change.
This document is intended for UAE-resident individuals with existing UK pension arrangements and should not be relied upon by persons in other jurisdictions without taking appropriate local advice.
GSB Capital Ltd is registered in the Dubai International Financial Centre (DIFC), licence no. CL4377, and is regulated by the Dubai Financial Services Authority (DFSA) under reference number F006321. Capital is at risk. The value of investments can go down as well as up, and you may not get back the full amount invested.