Should you buy Tilney Bestinvest as an expat?


Tilney BestInvest Ltd, or Tilney Group, is a financial planning and investment company. They became famous for their `spot the dog` commentary, where they critique bad funds that underperform. They have an office in London but also have worldwide clients, due to their distribution networks across the Middle and Far East.

Where is Tilney Best Invest sold?

They have offices in London and the UK but they are also sold in the Middle and Far East due to a "commissions only" broker relationship they have. In the overseas market, Tilney is sold under a life insurance wrapper and is much more expensive than buying from the UK. So this review should be more considered a review of Tilney BestInvest for expats in the Middle East, South East Asia and beyond, rather than a UK review, even though a percentage of what we will explain will be relevant to UK investors as well.

Each of the Tilney Bestinvest funds will come with a certain class and associated charge. As an example, IFSL Tilney Bestinvest aggressive growth portfolio "clean" account is very different to the "unclean" version. In other words, the "clean" version pays much less in terms of commissions/fees to the advisors.

Who usually buys the funds outside of the UK?

It varies but typically British expats, alongside Japanese, South African, Korean, Norwegian, Swedish and other expat groups. Many of these expats are looking for something specific, like expat advice for British expats in Cambodia or expat advice for Japanese people in Malaysia or Thailand. Some are looking for something more vague, like financial advice in Hong Kong or another location.

What are the positives about BestInvest?

  1. They are a large and established group, although large doesn't mean better! It can just mean you are treated as a number.
  2. You probably won't lose a lot of money in the funds. You might see a stagnating portfolio or get lowish returns, but you likely won't see huge losses if you hold on long-term.
  3. For UK-only clients investing through SIPPs, the fees are more reasonable than for overseas clients. They typically charge 0.2%-0.4% service fees, depending on the account size. There are additional fund fees, however, which are quite high - as much as 1.60% per year.
  4. The funds are liquid, meaning they are daily priced. That doesn't mean there aren't charges for getting out of the investments, but they are not opaque and highly illiquid investments. In other words, if you have a $100,000 investment, even if the fees are $10,000 for getting out as an example, you will be able to exit quickly.
  5. A small percentage of their funds have performed well. However, as we will explain in more detail below, it is often impossible to know which funds will do well in advance. Even their best performing funds have also struggled to beat the market.
  6. They can be held in a tax-efficient manner, both in the UK and outside the UK. However, so can many other investments, so this isn't a positive compared to all other investments. It is merely a positive compared to some of the less tax-efficient options in the market. An example of a tax-inefficient option is usually sending money back to your home country unless you are American.

What are the negatives about BestInvest?

In general, the negatives are far bigger than the positives, especially for expats.

These negatives include:

1. The fees are high. Not the service fees but the fees within the funds. The Tilney BestInvest Defensive Portfolio and Tilney BestInvest Aggressive Portfolio both charge up to 1.60% per year + up to 5% initial charge. You can invest in index trackers from 0.03% per year! There is an incredible amount of academic data that shows that fees matter while investing over the long-term.

2. Fees in the UK aren't the best compared to some providers but pale in comparison with the charges in the overseas expat market. The reason is simple; there are multiple fees:

  • 1.5% annual management charge (AMC)
  • Over 2% per annum ongoing charge
  • Up to 5% upfront
  • Up to 1%-2% yearly depending on which bond and QROPS/provider is used.

To put it simply, you are getting numerous fees and these compound over time. The life insurance fee, BestInvest fee, broker fees and sometimes QROPS and SIPPS fees all add up over the years.

3. Brokers will claim that they have given discounted fees - in other words rebated the fees. Even if this is true, the net fees are still very high.

4. Numerous reviews online have suggested that withdrawing money can be difficult, with plenty of procedures to jump over. In other words, in a digital age, the firm hasn't adapted. Or at least, the brokers selling Tilney, haven't adapted. Often withdrawing and adding money online isn't an 2022 this isn't good enough.

5. Linked to the last point, as Tilney is sold overseas in conjunction with some old fashioned products, the procedures are even more complicated than in the UK.

If you want to withdraw from these investments, the third-party providers often ask for physical paperwork, updated proof of address and other things. We have helped expats withdraw from these investments and it has often taken over 1 month, for some small silly reasons, like the signature on the withdrawal form isn't an exact 100% match to the one they have on record! Added to the hefty penalties for getting out of the investment, this was a tough pill to swallow for these expat investors.

6. Passing the buck is easy. If a broker outsources their investment process, they will claim that it is to reduce conflicts of interest.

This might have some merits. However, many brokers will be able to blame Tilney for underperformance, claiming that it is simply their job to "be the financial planner" and not "financial advisor".

7. The outsourcing process often creates not only multiple layers of fees, but multiple layers of complexity.

8. Customer service has been referred to as "uncaring". In effect, this means that you are treated as customer number 108,088, rather than an individual. There have also been reports about regular trading and IT error.

9. It is a myth that Tilney can give you a better "risk-adjusted return". Advocates for the company might argue that they won't beat indexes like the S&P500, but they can offer you less volatile and safer returns. This is largely a myth as you have additional risks going with this option, including "human error". This also means that as the management team that runs your funds changes, your returns might change. Another issue is complacency. Even many top-performing managers can struggle after many good years - indeed today's winners are often tomorrow's losers in the fund industry. Every dog has its day, as the expression goes, and relying on BestInvest to beat the market on a regular basis, or even reduce your risk whilst failing to beat the market, is statistically unlikely.

10. Your mileage will certainly vary in terms of the service you get in the overseas market. Investor A, with advisory company A, might get much worse service than Investor B, with advisory company B. Even within those firms, the individual advisors will have contrasting levels of service.

11. Linked to point 10, they aren't especially careful with the introducers (= commissions chasers!) they pick in the expat market. So your mileage will vary even more overseas, compared to in the UK.

Which offshore products are BestInvest sold through?

The main providers are the same ones that are reviewed here above. These life insurance providers are usually in Isle of Man, Guernsey, Bermuda, British Virgin Islands, Cayman Islands, and Jersey. It makes sense, in many ways, for expats to invest overseas and offshore when they live outside their home country. So the issue isn't where the money is invested geographically, but the fees and charges within the plans. This results in many complaints and bad reviews, especially when early surrender and redemption charges aren't mentioned. Moreover, whilst Tilney is regulated by the Financial Conduct Authority, the firms selling them overseas are not! That isn't a problem in of itself, but don't think you are getting enhanced protection. The Labuan license, moreover, is a life insurance license, instead of a financial license. Life insurance-related products can be connected to investments though; they are just much more expensive than pure investment platforms.

What are the fees like within these products?

It varies, but typically 1%-4% per year depending on many factors, including whether you contribute to these plans until the end of the term. On the savings plans, you often can't get bonuses if you fail to contribute every month, meaning you only get the fees and not bonuses.

What is BestInvest performance relative to the stock markets?

If you had invested in the BestInvest aggressive portfolio, in comparison, from 2015 until now, you would have about $129,000 before the aforementioned fees.

The BestInvest Defensive Portfolio has only produced about 2% per year before fees, meaning several offshore investors are seeing negative returns, despite markets being up. It is a numbers game - compounded fees harm compounded gains. 2% per year easily gets wiped out by the aforementioned high fees. Even 7%-8% per year gets reduced to 3%-4% if the compounded, indirect, fees are high.

Does that mean that BestInvest never performs well?

BestInvest funds have of course performed well during some period, especially if markets are performing very well. However, that doesn't mean they have performed well compared to the overall market. Take some recent years as an example. On the surface, some of the funds haven't done badly. It is only the huge fees, in turn, that will compound over a long period of time. That means that over a 20-30 year period, these fees will really eat into your returns.

Are there charges for getting out of BestInvest products?

The funds are liquid, so often UK investors can get out without penalty. However, if you have bought BestInvest through an offshore life insurance company, there are charges for getting out. On lump sum products, the charges last for 5-14 years, depending on the terms and conditions of the product. On regular savings plans, charges last for 5-30 years, depending on the terms of the contract.

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

It depends. In some cases fund changes within the existing product makes sense. In other 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 much cheaper alternative. How high this maximum penalty-free surrender is 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 maybe 95% or more, but the specifics depend on the offshore life insurance provider. However, over time, the amount you can withdraw penalty-free increases.

Are most clients happy with the returns?

In general, we have noticed a trend. Clients tend to be happy in the early years of expat accounts associated with this option. This is often because the fees are lower in the early years, and also in part because of the welcome bonuses that third party providers give as an incentive to sign up. However, by year five, six and seven, the situation starts to change. We have never found a happy client that has been in these policies for ten years or more.

Mistakes to avoid

The biggest mistake investors make 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. We have even seen investors wait 2-10 years to avoid this loss. The rational thing to do is accept the $5,000 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!

Will the bonus make a difference?

Many of the providers that are sold in conjunction with this option, will claim that bonuses and extra allocations will decrease the fees substantially. In reality, even adjusted for any bonus, this option is too expensive. That isn't even taking into account the fact that there are so many terms and conditions for getting those bonuses in the first place.

When do most people take action?

Due to the fact that the fees compound and get worse over time, expats wait 5-8 years+, before taking action. It makes sense to do something sooner. The reason that many people wait so long to take action is that first and even second-year performance can be good because welcome bonuses disguise the huge fees.

What services do they offer in the UK?

It isn't up to us to mention their UK-specific services, as we focus on expats. However, they do offer some UK-specific services directly - in other words through Tilney and not third-party platforms or brokers. Those services include the BestInvest Junior ISA, Bestinvest SIPP and BestInvest Investment Account. The Junior ISAs allow parents to save and invest for their children's future, in a tax-efficient manner. In general, the reviews on these are more positive than their overseas expat offerings, but better solutions still exist nevertheless.

How about during periods like this in 2022 with falling markets?

Nobody knows how well Tilney's portfolios will perform during periods of falling markets. This does appear to be a good time to invest in markets, but there is no indication that BestInvest's portfolios will do better during such periods. They didn't do well in 2008-2009 and they are unlikely to do well in 2022. What is certain is it isn't a good idea to "wait and see" if you aren't happy with your existing portfolio.


Tilney is a very expensive option for expat investors. Buying this product in the UK, is completely different to buying it as an expat, for the reasons given above. Many expats buy into the plans thinking they are getting a UK-regulated solution when that isn't the case. Just because the funds are regulated in the UK, doesn't mean the expat platforms are also regulated. Regulation though is the smaller issue compared to cost. In sum then, it is ironic that Tilney does a "spot the dog" feature, where they mention the worse performing funds. The recent stock market declines and volatility is a good warning to potential investors. Despite being told that diversified funds would reduce the volatility during bad times, even if they don't beat the market long-term, Tilney's funds haven't beaten a diversified portfolio of index and bond funds. Perhaps one day they could mention some of their own funds in the spot of the dog commentary!

What can you do if you have a BestInvest policy offshore?

There are three options we have explored with people in the past; completely surrendering the policy, partially surrendering and stopping contributions.

It isn't easy to say which option is usually best for you, as that depends on each client's situation. 

If you have a policy with Tilney Bestinvest funds and would like a conversation, please contact us: