Tan Kin Lian's Blog: Zurich Vista Plan

Wednesday, May 27, 2009

Zurich Vista Plan

A few policyholders have invested in the Zurich Vista plan. They are now unhappy that they have not been informed about the high surrender charges and other features of the plan. They wish to consider appropriate action. If you wish to join them, give your particulars here.

22 comments:

hongjun said...: I also heard of this plan but it was explained clearly by my adviser.

It is not suitable for me.

Cheers
hongjun; May 24, 2009 10:59 PM
zhummmeng said...: Zurich Vista was a baby of the now GM of other channels of ntuc. Other than been a former pru he must have foreseen the trouble that was coming.; May 25, 2009 12:07 AM
Khiat Han Hwee Adrian said...: Zurich Vista is an ILP marketed by some IFAs. There are several layers of charges and a maturity date where a certain portion of investments are lock until maturity. Other than Zurich, Aviva and Friend Provident are also marketing such plans.

The cons: High Charges
a) 4% p.a charged on the 18 months Initial Contribution Period(ICP).
b) 0.75% ongoing fee on total portfolio.
c) 0.75% mirror fund charges which add up the total expense ratio.
d) Surrender charges on ICP which will decrease when nearer to maturity date.
e) The high premium which one are not advised to stop or reduce before the completion of the 18 months.

The pros:
a) An initial bonus allocation as much as 182.5% in the first 12 months.
b) Access of exotic fund houses with Zurich as the gatekeeper in selecting the best breed fund managers
c) The zero bid-offer spread
d) An insurance component which can be purchased as a joint account and insurance kicks in on first death, unlike normal UT.

Cheers
Adrian Khiat
http://akhiat.blogspot.com; May 26, 2009 1:36 AM
Tan Kin Lian said...: I received only 1 response to this survey. So, looks like there is nothing much that can be done through collective action.; June 02, 2009 7:22 PM
Anonymous said...: As a fellow investor, I feel real sad after i've read of the complaints that some people have. Don't people realise that there is no free meals out there, for every gain there must be a lose some where. Fees are definately involved when investing. No one is forcing anyone into any financial instruments, one should take responsibility of his or her investments and stop blaming everyone and anyone once something bad happens. Risks are everywhere. Oh one more thing. The one thing that one should fear is fear itself. The great depression was caused by fear & greed. By spreading fear, one is only making the recession feel worse.; August 04, 2009 7:08 PM
Anonymous said...: Ok, a very interesting read concerning your thoughts towards the Zurich Vista Plan. Please let me reassure you on the following points.
1. The Vista is an extremely cost efficient vehicle. If you have not been educated on how the charging structure works then you may believe it to be expensive. I have found that a lot of advisors out there do not understand it themselves, therefore they cannot explain the structure correctly. Once the charges have been explained you will agree that it is cost effective ! It is significantly cheaper than trying to do something on your own. Also be careful that some banks may charge additional fee's compared to independant advisors.
2. Penalties to cancel - The plan is intended to provide for your future. There are certain rules you must follow however there is no need to incur a penalty at all with his plan. Yes there is an 18m initial period that you must cover, but again if somebody that is knowledgable has explained how this works and how you can use this and not incur penalties then you would understand it better.
3. Flexibility - This plan affords a massive amount of flexibility. Please show me another plan that matches it !!!
4. Listening to the advice - there are some companies out there who only recommend the Zurich product, there are a few who represent all the regulated companies/products available. If you feel that you are being pushed to "buy" this product ask them to show you an alternative. There are always other options. In their defence the Zurich plan is pretty much one of the best out there............just not the only one !
4. Poor return on investment - Well this plan does rely on the stock markets to make you money, as do all investments. If the stock market crashes then your savings appear diminished, but this is only a paper loss. It can be great news when the stock market comes down in value. Once the market has recovered, which may take months/few years then your savings will also recover and you would have benefited from buying into the markets at extremely low prices. Ask yourself one question ----- would you rather buy something when it is cheap or when the price goes up ?

Please note, If you feel that your advisor isnt explaining things correctly then dont sign any paperwork until you are happy !

I have been in this industry for over 15 years and there is nothing that annoys me more than when people start criticising a particular product. I wouldnt mind if it was a poor product but when it is either a lack of understanding, or even worse a lack of proper advice being given then I feel it is unjustified. It is also unwise to listen to comments posted on web sites, everybody has a different experience when saving their money, Just because they arent happy doesnt mean you wont be ! MAYBE IT IS A POOR CHOICE OF ADISOR, OR MAYBE THE DIDNT UNDERSTAND WHAT THEY WERE DOING (OR WHY THEY WERE DOING IT) !

I hope my little rant/explanation helps you all !!

Financial Advisor; October 05, 2009 3:54 PM
Anonymous said...: It is interesting a "finacial advisor" is getting annoyed that investors are complaining about this high fee plan. Some FA's love this plan because of the high commission they get for promoting it. Sure they love it, but the investors don't. Vista is a great plan for FAs, but not for investors. Look else where, in fact if you have an FA recommending it, you may want to change advisors too because chances are he is looking out for his commission not your well being; November 13, 2009 3:19 AM
Arlene Legaspi said...: Hi! 3 years ago, I started this Vista plan in the UAE. There were a lot of us in the aviation industry who took this policy, ranging from ages 21-25. All laymen, novices and just beginners on investment. I took a Vista policy that would mature in after 5 years. Some of us took 7 - 10 year terms.

I can say that the FA's here in UAE has no enough knowledge as well of the policy. Some of us have terminated the policy already because of mismanagement. We were so disappointed about the charges and other features of the plan that wasn't brought to our attention at the onset.

During the recession, when all of us were panicking about our investment, we learned that our former FA told all of us hopeful statements that made us buy the policy. All of us policy holders, being all laymen, understood what he said the same way. Only to find out when he left that the policy features otherwise or that he didn't mention the downsides of Vista. The worst thing is the next FA assigned to us apparently doesn't have enough knowledge, as well of our policy.

Right now, the rest of us who continue with the policy only holds on because we don't know better than that decision and instead of subjecting ourselves to very high charges upon surrender or termination.

My friend just recently terminated her policy because she is starting a family. She has invested I think around $11,000+ and she only got $465? upon termination. She was shocked because the initial computation of our present FA shows otherwise. When she asked him, why it turned out as such little amount. He said the previous FA didnt mention that our policy was not a VISTA, it was a VISTA 3.

We were so confused because we were given all vista policy booklets and all our documents says Vista. It was an absolute frustration.

I asked her to file a complaint at the Zurich website. But basically, we don't know what is happening. Can anyone enlighten us on this? And advise us on what we can do.

Also, I need an advise about my policy as it will be maturing in two years. With all these uncertainties that happened in our VISTA policy, how will I know exactly how much I will be getting? Would there still be hidden charges upon maturity? It is a hard earned money and Im afraid that after 2 years, on maturity, my capital money would all be gone. How will I make sure that I get what I expect to get at the date of maturity.

Please help us.; December 05, 2009 10:33 PM
Anonymous said...: This is the worst plan going next to a ponzi scheme. What they do is pay high selling commissions to so-called financial advisors, but these FA's are like the ones mentioned above, in experienced and out for their own buck. Anyone searching the internet to see if Zurich is good to invest in....DON'T. Hopefully more people will take the time to protect others from the company. Legal action should be taken against this company and their mis-leading promotional material.; December 06, 2009 9:44 AM
Anonymous said...: Dear All, Insurance is a long term product i.e 10 yrs and beyond.All Plans have initial charges for obvious reasons.Do we expect insurance companies to sell us free?Do we expect insurance advisors to provide free consultation? Yes, they are supposed to earn through ethical means and not missell. Commissions are their livelihood.Commissions are part of initial charges. Charges are necessary to cover legal expenses, stamp duty,direct and indirect taxes, administrative expense, medical costs, underwriting and acturial costs.These are great products for long term basis esp if you take a good risk cover for family protection.; December 26, 2009 11:34 PM
Unknown said...: I am a specialist doctor. I must say the vista plan has been one of my worst investment ever. I paid 2500 dollars montly for almost two years. Out of the 50000 dollars or more that I invested, I only got back about 17000 dollars. My ex-financial advisor who sold me this product did not mention about the exorbitant commission fees and enormous charge with severe penalty. I no longer seek his advice since I terminated the policy. Fortunately, I invested in stocks (mainly US stocks and commodities) this March in 2009 and made about a few hundred thousand dollars since then. I am also fine tuning my skills in stock (CFD) and forex currency trading after having attended some trading courses locally and online overseas courses. The bottom line is you have to be an active investor or trader to ensure your money grow optimaly. The other thing is to get a comprehensive insurance cover to protect yourself.; December 28, 2009 3:49 PM
Anonymous said...: Dear All, This is not being promoted as an insurance plan it is being promoted as a savings plan. The advisor I had, and I use that term loosely, told me that the insurance is just a front to get past regulators. I was told the insurance fees were nominal. I would say any posts on here promoting the product are either financial advisors who get paid so well from the plan or Zurich employees themselves. Anyone on here researching whther to invest with Zurich or not, can certainly see we the investors say "no way"; January 15, 2010 5:20 AM
Anonymous said...: Hi all

Had heard my FA talking about this investment. From what I had heard from him.
1. This is a so call boutique fund which previously is catered for Accredited investor.
2. There is a lock on period of 18 months initially.
3. After the 18 month period, there will be penalty charge if I terminate it, the earlier the heavier the penalty.
4. The investor must be prepared to hold till the end of the 20 or 30 yrs plan accordingly.
Is there any other information that he had missed out.

In my opinion, if my FA had already informed me of all the pros and cons, he did not mis-sell

If I already prepared to lock on the investment till the end of the plan, will this investment be better than those I buy from fund supermart or dollardex, not taking into consideration the liquidity.

rgds; February 28, 2010 12:17 PM
Anonymous said...: Hi all,

need some advise on the Zurich Vista plan. I started with the zurich Vista plan in November 2007. i have been paying $2,400 oer mth.
Question is ; Is there any penalty incurred/additional hidden charges if i were to reduce my mthly contribution to $400 per mth ( instead of $2,400 .

appreciate your advise on this matter.; May 05, 2010 11:06 PM
Unknown said...: Hi,

Basically Adrian Khiat has explained the charges and features in the earlier post.

Put it in simpler terms, these funds are managed by Blackrock, JP Morgan, Morgan Stanley, Threadneedle etc. There's no way a

normal investor could have access to it unless you have a liquid asset of $2mil through private banking.

It gives you the exposure to exotic funds like mining, energy and new energy and regions like latin america, middle east and

africa whereby they already had that long term track record. These track record you don't quite see it often in the retail

funds.

Before investing into Zurich, you must understand that investment is not speculation. There will be ups and downs aka

volatility. That's why you will need to do dollar costs averaging in Zurich vista. Another thing that you must bear in mind

is that the areas that you are investing in maybe those developing regions where you will see its growth over 10-20 years.

Country like Singapore takes about 20 years to become developed. You must set your expectation correct that emerging

countries will not become developed over just 1 or 2 years and so is your investment.

And in terms of charges, in layman terms if you are confused:

- first 18 mths hold till maturity

- 19th mth onwards
->increase/decrease or premium holiday up to 3 years
->withdrawal @ NAV

So if you are looking to terminate the plan after 2 years, of course you will see a huge surrender penalty because the first

18 mths is supposed to be untouchable.

If you want to invest in Zurich Vista, you must get your concept right that investments are not speculations. There will always be ups and downs. Always look at the long term potentials that the plan can bring you. And frankly, in terms of high commissions, they could have sold ILPs from insurance companies with increasing mortality charges instead!; May 07, 2010 12:08 AM
Anonymous said...: Hi,

I am planning to start Zurich Vista Childrens educatinal plan and Zurich Futura for life protection. What i understood from above discssuion is that if we terminate the policy in short period, there will be big loss and if we continue say 16 years definetly some growth rate we can assure. Can i expect a growth rate of 10% ?? i woud be happy if i get 10% growth rate after deducting al charges. Whats your opinion????; May 13, 2010 8:03 PM
Unknown said...: Basically the rate of returns you are expecting depends on what type of funds that you are choosing based on your risk profile. You should really post this question to the advisor who is recommending the plan to you because he will know what are your needs and your acceptance towards risk to advise you on the expectation of the returns.

At the same time, always bear in mind that investment returns are non-guaranteed. You need to have a back up plan in case you need the money when there is a correction.

Just to give you a rough idea, a balanced fund in the retail side can achieve a 5 years performance of about 6% p.a. Equity funds you can more or less expect about 7-9%p.a. depending on which area you are investing in.

So if you are putting more focus into emerging markets (equity) which you would probably expect two digits of growth in the next decades, probably ya... 10%p.a. is a reasonable expectation.

Just my two cents. Do correct me if I'm wrong. :); May 14, 2010 12:36 AM
Anonymous said...: can someone please advise me....i opened a zurich investplus but as my husband lost his job i wasnt able to complete premium payments after 1 year, so the plan lapsed and now they want me to pay about 12 premiums till date as the plan has minimum 18m.....should i try and pay up to reactivate the plan? also if i send them a notice of cancellation will i get anything back? i mean i have already paid about 10K USD during the first year and they have used my money...so what happens~? would appreciate your comments. thank you in advance.; May 26, 2010 4:30 PM
Unknown said...: as a financial adviser i can assure you that missing one payment does NOT mean you lose your money.; June 03, 2010 10:30 AM
Unknown said...: Folks, I need your help here.
I'm considering a Zurich Vista plan. Has anyone gone for a similar plan, would you recommend that I proceed or walk out.

Thnx for all the help; February 05, 2013 11:04 PM
Concerned Adviser said...: To readers who see this comment and consider the Zurich Vista which many supposedly unbias IFAs are recommending. I like to share the below:

Before you embark on this plan, consider the following cost and analyse if you have better options.

1) 4.75p.a on your first 18 months contribution (Pot A)
2) 0.75%p.a on your subsequent months contributions (Pot B)
3) Additional 0.75% mirror fund charges on top of the usual fund management charge of 1.5% to 2%p.a. This will effectively reduce your fund performances by 0.75% when compared to actual fund. (Most advisers will conveniently left this part out).
4) $144/year policy fee. Eg, If you are putting $700/mth, you are already losing 1.7% upfront every month.

Ask the following questions:
1) What is the type of customer service can you expect from Zurich considering the high cost you put to them.
2) Ask for a statement that show you performance of individual funds by percentage because you need to how your individual fund is performing before you can make any switches.
3) Ask if Zurich breakdown the fund into 2 pot namely the 1st 18 months and the subsequent 18 months because the Pot A cannot be withdrawn till maturity and only Pot B can be withdrawn.
4) Ask how many of their Zurich funds had outperform funds that you can in retail market including ETFs.
5) Scrutinise the Benefit Illustration. Look into the distribution cost and ask how much your agent is getting. Also ask why the profit is still so low when the funds are projected at 4% and 8%.

* If the adviser says that they are giving you bonus units, remember that the bonus units are in your 18 months pot (Pot A) which they will deduct 4.75% from you annually and they effectively take back all your bonus units in simply a few years.
* Also don't be tricked when the adviser show you a profitable portfolio because the adviser will choose the best time period where best profits are made and the profits are not considering the 4.75% charges which the investor have to incur many many years down the road.

* They promise you high returns but remember that performance is not guaranteed but the cost are. You have many options available.

If you meet an adviser who strongly recommend you this plan, then I'll encourage you to look for a more honest and compenent adviser to help with your finances.

Good luck to your decision making and my advise is "Don't fall into it"...; February 06, 2013 12:55 PM
Tan Kin Lian said...: Read this link
http://tankinlian.com/admin/file.aspx?id=740&IID=746
.
Are you interested to use the Consumer Consulting service?
You can fix an appointment with my staff.; February 07, 2013 9:13 PM

Wednesday, May 27, 2009

Zurich Vista Plan

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