Comment posted in my blog
Now, our MAS hold a press conference when HKMA has already achieved so much and are closed to a resolution! But our MAS STILL DON"T GET IT! Our MAS still thinks that Minibonds is just mis-sold, mis-represented to the old & un-educated.
Check first before you make this assumption. If only they bothered to even take a cursory look at the Minibond fact sheets they will know that it was designed to deceive & mislead on a mass scale. I don't know if the people & bosses in MAS have even bothered to look at the Minibond fact sheets or are they still at 10,000 feet.
MAS, please ask yourselves a few questions. Why should 1,000 Singaporeans sign a petition to ask you and Commercial Affairs Department to investigate the FIs if it is only the old, uneducated who have been cheated? If we are bluffing about being cheated, why be so silly to petition the Commercial Affairs Dept to investigate? This is mass cheating not isolated cheating. I hope you get it.
Ask yourselves why are so many people in Hong Kong & Singapore protesting not just the old and uneducated? Ask yourselves, why should the banks in Hong Kong agree to buy back ALL their customers' minibonds & not just from the old and uneducated? The banks are not silly or charitable. If it is a few isolated cases, they will only compensate these few cases. Why compensate so much more? Please open your eyes & investigate properly before you say anything.
I fully sympthize with the old & uneducated being taken advantaged of by the banks. It is totally unbecoming of the banks to do such things. But the old & uneducated are not the only ones being cheated. Do not assume that the educated cannot be cheated. MAS, you are already tardy, do not further damage your reputation by jumping to the wrong conclusions so fast without proper fact finding. We have all been taught that ASSUME makes an ASS of U&ME. Please check if what you think/say is an assumption or a fact. Please don't mess up again and cause us further anguish & frustrations.
Nice composition - he deserves 100 marks.
ReplyDeleteBased on the MAS Statement,my perception is that the official view is that the majority of the investors make a bad investment.
ReplyDeleteMis selling probably applies to the old and uneducated?
So tough to get MAS to investigate and save investors. Sigh...
The logic is very simple - if their controls are so lack to allow the RMs to mis-sell to old folks and uneducated, it has to be that there is no system in place to prevent mis-selling.
ReplyDeleteMAS step in and get the facts - fully, directly and thorough. That is all Singaporeans ask : Do your job!!!
First, political leadership is lacking in this crisis. Now, incompetency is suspected. That's the problem when a group of people decided to overpay themselves.
ReplyDeleteLacking leadership? Incompetency?
ReplyDeleteMore likely, a conflict of interest.
DBS is a GLC in Sg.
DBS has no godfather in HK.
Hence 2 different responses to the same problem of mis-selling.
1.MAS must investigate whether there is fraud by FIs
ReplyDelete2. Mis-selling and misrepresentation by salespeople
3.Why toxic products escaped through the net
4.Why RMs breached section 27 and not detected by MAS
5.Why product selling is allowed when section 27 clearly states that it should be need based
6.Why no audit
7.Why internal control in FIs is so lackadaisical. Are there internal breaches of the laws?
There is conspiracy between the FIs and their salespeople. The RMs push aggressively, by hook and crook,the toxic products and what awaits them is huge commission and promotion.
ReplyDeleteSimilarly there is conspiracy between the insurance agents and the company. The company produces toxic products and the greedy agents push them to ordinary folks and get huge commission and incentive trips and mdrt award.
Meantime, the folks don't know what hit them and after 20 years discover the toxicity and some die without knowing the toxicity.
The agents laugh all the way to the bank, get mdrt and holiday on the policyholders' expense.
Frankly I was so frustrated and disappointed upon reading y'day paper about MAS' call to give priority to the lowly-educated retirees. Have they not wondered even the educated ones are being cheated what more the lowly-educated ones??
ReplyDeleteI am feeling a sense relief reading this comment (thank you so much), as I believe it reflects the sentiments of many educated working-class (conservative) ones who were cheated by the banks that the MINIBONDS (Series 5/6) were almost like Bonds & Fixed Deposits (with maturity). To me, the name 'MiniBond' itself has been designed to cheat in the very first place. Moreover, Lehman Brothers has never been indicated in the advertisement/ brochure as well as mentioned by the RM. What was clearly indicated are 6 FIs/banks namely Citigroup, DBS Bank, Goldman Sachs, HSBC, Merrill Lynch & Std Chartered - still wondering how these 6 could allow the use of their names for selling of the products. The mentioned of these names definely had given the confidence to the educated ones I believe, and on hindsight it's just a facade to deceive.
I sincerely appeal to MAS and CAD to have a thorough investigation of this cheating case.
I have been brought up with the impression that banks are safe and sound place, where we placed our money for safe-keeping. This is no longer so to me. Sigh...
Thank you Mr Tan for speaking out the truth and requesting MAS to investigate.It is not only the illiterate and Chinese-educated citizens that are cheated by the FIs, but the literates and not so conversant with financial products. The prospectus stated that minibonds 'invest on solid foundations...and credit-linked to six major financial institutions...you can enjoy the returns you derserve with peaace of mind' If this is not a case of misreprensentation, what is it?
ReplyDeleteI do not invest in structured products but feel very sympathetic and uncomfortable so many lost their savings.Totally agree not just old and helpless misled!!
ReplyDeleteI am a engineer by training and often stumped by the way the FI present their materials...often difficult to understand and ambiguous. I believe I am not an isolated case. Most bankers will find bending moment, torsion, stress,strain, etc unfamiliar. I think it is unfair the general public (even the educated, to some extent even those in the finance field) have to understand the terminology presented in the prospectus so to some extend, the BIG PRINTS on the brochures, banks and financial advisors are relied on to translate.I am frequently told by bankers capital protection is "bao ben" in mandarin which means "sure get back capital".
The general public depends on various local bodies to regulate and protect our food safety, engineering practise, money, etc so MAS should be vigilant to regulate wordings like CAPITAL PROTECTED/ 100% protected NOT appear on brochures, unless the promise can be delivered. Then the FI will not be able to able to utilise these misleading words to educate their RM to sell their products.
"MAS is a very professional, rational institution. It doesn’t try to put pressure on people, it doesn’t make big speeches to convince people that it is doing many things. Behind the scene, I can tell you, MAS has been quietly working with the banks and financial institutions to find a fair solution for people who have invested in the products."
ReplyDeleteThe senior minister said everyone must view the losses in perspective — millions have lost their savings worldwide, so Singaporeans must be realistic in their expectations."
You guys think that MAS was sleeping? Wrong, MAS has been working QUIETLY with the banks, you dunno , don't anyhow say. Unlike the HK counterpart, it didn't want to make big speeches and put pressure on people to pay up.MAS is professional and rational. Not like somebody up north making empty promises.
So what is the result?
Please see your losses in perspective. You are not the only losers. There are millions of them.High risk high return. CPF is till safer. oop.solly I just came back from China.I got no head no tale.
Anyway we start with the old ones because they are vulnerable, cannot read the prospectus. The educated ones, huh? Maybe, maybe..
Hi all investors, I am one of the so called "educated" one. I am a graduate with years of experiences in investment. In Mar 07,I called DBS because I wanted to buy Treasury notes which only marketed by DBS. A week later, she called me to go and see her and recommended me High Note 5. I trusted her because she knew my intention was to invest in long term and safe investment. She told me DBS HN5 was a low risk product and was structured by DBS and was selling like hot cake. I trusted the brand name of "DBS" and then invested in this so-called low risk 5 1/2 years structured deposit. She even told me that potential loss the most is one of the eight reference entities which will go into trouble. If it is happened, I will loss the most 1/8. I told her I could take 1/8 loss after she told me it was highly unlikely. This is how an educated retail investor got cheated.
ReplyDeletePlease write to dbs.hns@gmail.com to share your experiences with all fellow investors. Particularly those "educated" investors.I believed some of you had the similar experiences.
If this RM read this note, please write to the above email to testify what I stated above. We want DBS to know that not only the "vulnerable group" are to be taken care with. We, the "educated" investors needed the same treatment as well.
The author wrote this article very well. This is exactly how I feel - I am cheated in this whole Minibond thing and really hope the authorities will investigate.
ReplyDeleteI am tertiary educated in engineering and I believe I read and listen well, yet I am cheated in this purchase. I guess we engineers call a product by its proper name, and explain a product as it actually is. We do not call a product Minibond when it is not a bond.
Some people just don't get it... Prospectus was sent only weeks after one has committed. If the bank has no intention to cheat, why didn't they base on the prospectus to explain the truth instead of using the brochure and send the said prospectus only weeks later, when one had already entrusted the bank and would then think prospectus as part of formality.
ReplyDeleteI would like to urge those who are not in the predicamemt to understand the position.
Which sound minded person would put his/her hard earned and life-time savings in jeopardy for a mere 5-6% p.a. returns?
Can MAS study these Prospectus and Pricing Statement. especially in the Risk section? Does these document fully and clearly disclose the risk? The risk of the Underlying Securities (which is the asset back the Minibond) is much higher than the risk of the 6 reference entities. Does these documents purposely hide this risk or they don't know it ? If FI or MAS don't know this risk at the time these documents released, how can u expect the non- finacial professials whether educated or not to identify this risk at that time?
ReplyDeletevery honestly speaking, most of the times, salespeople mail you the prospectus out of sheer laziness & too much work, too little time. Not a deliberate intention to cheat.
ReplyDeleteI am shame to say I am educated but be cheated. I know Banks promote many products unfair to customers, so I never think about unit trust, bonds funds, whatever captiabl protected or guaranteed products. I do not know the detail ,but i know there is always some traps.
ReplyDeleteSO I asked straightforward I need to buy bonds only. And the RM sold this toxic prodcut to me, at the time, I told him many times I do not want to any other products but bonds, I know I do not have time to go through the prospect and have a accurate understandin on any other financial products, so I only want bonds, and I am preparin for the risk for bonds.
Since the RM confimed many times that is a bond, I took his words. It just like you want to put a FD, you do not need to check the detail regulations of FD, you know a FD should be work likea FD.
Now I know they are not bonds at all. This is how an educated be cheated. It just like a chemist can not different toxic milk powder or non-toxic milk power in a supermarket.
I came across one prospectus that wrote, "the prospective investor should read or given an opportunity to read the prospectus before investing in the note." This I truly believe that many, if not all, were not given an opportunity to read the prospectus at all; not to mention the complicated clauses inside. If most were given an opportunity to at least read the risk involved that is stated in the prospectus, I am very sure they would not even go into such a case in the first place. I pity not only those old and uneducated people but also those educated but not savvy investors. I hope more can be done for these people.
ReplyDeleteHaiz. I dont know who and what to trust or believe anymore.
ReplyDeleteGoing forward, the only safe place to put my hard earned savings in is Savings and Fixed Deposits even though the interests are pathetic.
Another alternative is to keep cash.
Everything else is TOO RISKY.
I really dont have the financial, legal and psychic abilities or the energy to try to read, understand, interprete or second guess what the products are and what I am in for.
How Educated Men was Cheated by DBS
ReplyDeleteEver since the legacy of Minibonds and HN5, I am having a nightmare of my investment towards HN10, which DBS, is the issuer and the Reference Entity is Capital Land Singapore. This note has just launched before the USA Financial crises. After the shocking news, I have approached my DBS, Senior Relationship Manager regarding this issue. She had explained that MB/HN5 and HN10 are two different scenarios as Capital Land Singapore is a well-reputed company which owns many lands, shopping centres and they also have many million dollars ongoing projects. On the other side, CL also partly DBS related company Property owner not money lender like Lehman Brothers and other USA Bank. Singapore Bank and company are protected by Government regulation. She had also assured it is 100% safe and I will be able to enjoy the half yearly interest and wait for maturity which is 3 years ahead.
I have tried to get her explanation about, I was not informed which I may loose whole or some of money if Credit Event occur. I wasn’t informed what I am hearing now about HN2 and HN5. I was looking something that capital guaranteed as the money is my children savings for their education which she knows too. Her answer was still the same as nothing will happen as this is Singapore Bank and Capital Land is a property owner and not a mortgage company like Lehman Brothers.
I am a very conservative family person who had never involved in any betting, share or any other risky business. If you look through my financial analysis by the Bank. They have also said the same things. Currently, I am really having a nightmare, what shall I do? Shall I withdraw my investment of 100K now, which I fear may lose 10-15% of capital?
Kalam Azad
email: kalam2002sg@hotmail.com
An aside:
ReplyDeleteI think that the financial knowledge of Singaporeans in general are quite woeful, even for the "educated" people...
Investor education seems to me is quite lacking - how can the regulator allow these products to be pushed through when even the most basic level of knowledge is not there?
IMHO, it is a structural problem - goes much deeper than just mis-selling and mis-representation...
Anyway, just to clarify on a comment made by anonymous (10.59pm) - there are many types of bonds - they are not "equal" in terms of risk and return...
Going to a RM and insisting on investing in "bonds" without specifying which type is opening up oneself to huge amount of abuse I think...
Again, this is due to lack of investor education in these products...sigh