There is a report about financial advisers advising low income families to wthdraw their CPF savings for investment in unit trusts. The financial advisers earn up to 3% on the front end charges and give a rebate to the CPF member. By churning these investments many times, the CPF member is able to withdraw a fairly significant amount of savings. The problem is - for every $1 that is withdrawn, the CPF member is likely to lose $3 (my guess) of savings.
The CPF tries to bar the errant financial advisers from being involved in the future. This is similar to telling a thief that if he is caught, he will be barred from stealing in the future. I hope that our Government will make this type of activity into a crime that can send the culprits to jail.
We have a law on Financial Advice, which is administered by the Monetary Authority of Singapore. Surely, this law requires the licensed advisers to operate ethically and avoid dishonest transactions, such as illegal withdrawals of CPF savings? If this is the case, the MAS should investigate and take action under this law. We cannot have people who are licenced to abuse their privileges.
Tan Kin Lian
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