Dear Kin Lian
You are certainly doing a great job for the community by bravely taking side against the establishments. If not for your effort at galvanizing support and media coverage I am sure the response by the banks will have been different.
My heart goes out to all the investors who have bought these derivatives without understanding the associated risks. I do not expect the vast majority of them to even have an inkling that these products can be so risky. After all when one steps into a bank and is told by their staffs that they have a very "safe" product to sell which yields higher than deposit rates then of course many will be simply sold by the fact that they are dealing with a reputable bank that will not dupe them.
I myself have been approached many time by staffs of banks wishing to sell me "products that are high yielding and safe." When I queried them further on their products abysmal return versus the risk they were unable to answer me. I guess they are only repeating what they have been taught not what they should know. I do not blame the staffs as most of the products they are selling have so many clauses, technicalities and conditions that they themselves are overwhelmed. I think the banks who sold these products should bear responsibility for any and all losses incurred by investors.
Well done and keep up the excellent work.
Paul (a fund manager)
Hi Mr Tan
ReplyDeleteTHumbs up for you. You have indeed made a difference!
Anonymous
Come on Paul, if investors are purchasing these derivatives without understanding associated risks, then the responsibilities lies mainly with the investor. If the investor is making tons of returns, are they considering of returning these to the institutions if the institutions (hypothetically) made the mistake on the calculation of the returns? Investments are not without risks.
ReplyDeleteHi Paul (a fund manager),
ReplyDeleteI would like to share a similar encounter regarding bank staff that sells investment products.
In late 1999, I was called by a DBS Private Wealth saleswoman to discuss some matters. I was an investments professional working on the trading floor. When I met her, she was trying to sell me US technology units trusts at $15k minimum investment. I had access to Bloomberg & Reuters as a trader and knew very well that the US markets were already very toppish. She was very persistent & used high pressured selling. Despite knowing that I was a trader & was concern about the toppish market, she tried to pyscho me that you cannot timed the market and that I should use the $ cost of averaging to smooth my investment. Slick but not good enough for me! I had to cut her off by walking out the door. 2 weeks later, NASDAQ crashed at 5000 points in early 2000.
"" I think the banks who sold these products should bear responsibility for any and all losses incurred by investors.""
ReplyDeleteThank you. Agreed with you.