Dear Mr. Tan,
A consumer survey conducted by MAS showed that only 33% are satisfied with the financial product that they have bought. 67% are neutral or dissatisfied.
In your opinion, does this reflect a general state of unhappiness among consumers?
REPLY
Consumers have been unhappy with the low interest rate paid by the banks for the past years. The interest rate is insufficent to offset inflation. The large increase in inflation rate this year has worsened the situation.
Many consumers switched to structured financial products and obtained an equally low return. Life insurance and investment linked products also incur high charges and will take a long time to reach the break-even point.
The negative experience of consumers on financial products has been reflected in their answers to the consumer survey.
MAS has now issued a proposed guideline to make the board and senior management of financial institutions to be more accountable for giving fair dealing outcomes to consumers.
Bad products with high commissions peddled by insurance agents seems tobe common now. Products like revosave and smart saver are rip off and yet aggressively pushed by unscrupulous and greedy agents who have no conscience for their clients. Many found out too late. This is why MAS has to intervene.We used to hear of unscrupulous agents, now we know CEO and senior managers are in cahoot too. Poor customers are betrayed by both company and agents.
ReplyDeleteDear Mr. Tan,
ReplyDeletein view of the current negative real interest rates, would you advise consumers to park their money in Money Market funds or Treasury bills, instead of leaving them in fixed deposits? What other alternatives are there, which offers higher interest rates without compromising on liquidity?
All three options are suitable for investors who do not wish to take risk for the foreseeable future, i.e. fixed deposit, money market fund (check that they are invested in high grade instruments) and government securities.
ReplyDeleteThe difference in interest rate is quite small, maybe 0.5% or 1% a year.
Then how can Ntuc Income guarantee in the Growth Plan 2% and non guarantee as another 2% for 10 year growth plan?
ReplyDeleteI was told of this when I visited Ntuc Income.
I was told it is compounded. Isn't this provide a safe choice?
Check again if the guaranteed is 2% for 10 years, it may not now. But is it a good idea to be locked away for 10 years to get 2%? Even it is 2%, did you know where is the other 2% coming from? It is from investment, from other riskier assets.If that is so, you are better off investing yourself.
ReplyDeleteIf you are using CPF, isn't CPF OA giving at least 2.5% and first $20K 2.5%+1 guaranteed and no lock in? If you are unaware, the agent will be guilty of non-disclosure.
For cash, it is better to park in money market.No gaurantee but capital is safe and there is good chance you get 3% for first 3 years
which is ZERO for Growth. No lock in and liquid and you can cash it anytime you need without penalty.
If you know how, you can design a guaranteed capital portfolio with this fund and other equity funds.I don't think your agent has any knowledge or able to do it for you. They are as clueless as you are.They are only keen to sell a product that gives them an extra good commission(the company is offering them 2% commission for this product).This explains why they are eager to sell you.
Demand full disclosure from your agent. He or she MUST tell you everything that he or she knows or ought to know and advise you accordingly,;eg CPF in order to give you the best advice so that you can make an informed decision.If you think there is no GOOD ADVICE you can lodge complaint with CASE or FIDREC. It is your right.
Zhumeng:o)