Some people (probably marketing the structured product) argued that 5% is a high return that justify a high risk. A safe return is 1% or less, which is the interest paid on fixed deposit. I disagree with this reasoning.
In my view, these investors are not risk takers. My reasons are:
1. Government bonds pay a return of about 3% per annum over a period of 5 years. It is guaranteed by the Government.
2. The 5% that is provided in the structured product is not guaranteed. It is actually paid out of the principal. Even if economic conditions are favourable, the investor may not get 100% of the principal paid on maturity. Even if the structured product is "principal protected", it is not the same as "capital protected".
3. It is irresponsible for the financial institution to earn a higher yield by risking the capital in credit default swaps. This is a gamble and is highly risky. This risk has not been properly explained to the investor. In most cases, the investor has been misled by improper advice and assurances.
There are strong grounds for the authority (MAS or attorney general) to investigate the financial institutions for wrong doings. I hope that the authority will act immediately. The purpose of the Petition to the Singapore Government is to ask for an investigation to be made to determine if any law has been broken.
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10/05 - 10/12
- Distributor: UOB Kay Hian
- Social responsibility to Singaporeans
- Speaker's Corner - 11 Oct 2008
- File an affidavit to support your claim
- Rebuilding the Global Financial System
- High cost of life insurance at older ages
- Class action against Lehman Brothers in USA
- Is MAS at fault?
- Unhappy with bank's complaint handling process (3)...
- Hong Kong - selling of structured products
- MAS publishes timeline for Minibond resolution pro...
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- Feedback on complaint handling process
- Difficulty with travel insurance claim
- Lehman Bond Probe Widens
- ST Index approaching 1900
- Petition has been lodged
- How the market really works
- Hong kong: Curb on banks' investment sales aired
- Complaint to MAS against a financial institition
- SCMP - DBS offers full compensationto mini-bond ho...
- Fiduciary duty
- HKMA vs MAS
- Global Financial Crisis - subprime loans
- Get information from my blog
- Book on financial planning
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- Bank agree to buy back risky investments
- No personal investment in credit linked securities...
- Media interviews on Petition
- Call for investors to take the next step
- Unhappy with bank's complaint handling process
- Financial institution fined for mis-selling
- Oversight of the complaint handling process
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- Hong Kong: Minibond investors demand full refund
- Restrict the issue of credit cards
- Petition to Singapore Government - 983 signatures
- HKMA investigates complaints of alleged mis-sellin...
- South China Morning Post: 2003 case sets precedent...
- New type of foreign talent
- Poor payout on Anticipated Endowment policy
- Is bond fund risky?
- Legal fees - action against distributor
- Credit default swaps - who benefits?
- Coordinated interest rate cuts
- Reduced bonus under Income policies
- Dividend under STI ETF
- Credit default swap
- Full particulars of investors of credit linked sec...
- Hong kong - minibond buyback proposal
- File a police report
- Securities Investors Association of Singapore (SIA...
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- Unable to give individual advice or attend to indi...
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- ST Index is still falling
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- Write to Monetary Authority of Singapore
- Meet the Member of Parliament
- My blog passes 500,000 visitors on 6 Oct 2008
- Petition to Singapore Government - Credit Linked S...
- Expensive to battle in court
- Consumer banking sells the structured products
- Loss of retirement savings
- Speaker's Corner, Saturday 11 October, 5 - 7 pm
- Section 199 of the Securities and Futures Act
- Section 27 of the Financial Advisers Act
- Request for help from Relationship Managers
- Petition on Credit Linked Securities, Singapore
- Capital protected product
- Service to the people
- CNBC short video on Minibond
- Is it wise to cash out on the structured product n...
- A highly risky structured product
- Selling of life insurance through multi-level
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- Elderly get hit the most!
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