A consumer approached me for advice. He invested his CPF savings and regular savings in an investment-linked policy sold to him by a friend. After some time, he found that the value of his savings had depleted by nearly 40 percent. He was concerned and approached me for advice - should he terminate his policy. The friend who sold him the policy had since left the insurance company.
He showed me the names of several funds that he had invested in. He had bought a recurring single premium policy, I told him that the loss could be due to the following factors:
- expenses deducted from the savings to pay commission to the agent
- high annual fees deducted from the fund
- decline in the market.
I am not familiar with the charges that are taken away from each recurring single premium, nor the annual fees deducted from the fund, and for the insurance coverage. But the deduction seemed to be quite high.
I had advised consumers many times to avoid investment-linked policies that have high deductions. I advised them to attend the financial planning workshop and the life insurance talk organised by FISCA. Many consumers did not heed my advice, and went to invest in the wrong products, causing them to lose many tens of thousand dollars. It is a very painful experience.
To attend the talk, you should register now at http://easyapps.sg/assn/Org/Event.aspx?id=5
He showed me the names of several funds that he had invested in. He had bought a recurring single premium policy, I told him that the loss could be due to the following factors:
- expenses deducted from the savings to pay commission to the agent
- high annual fees deducted from the fund
- decline in the market.
I am not familiar with the charges that are taken away from each recurring single premium, nor the annual fees deducted from the fund, and for the insurance coverage. But the deduction seemed to be quite high.
I had advised consumers many times to avoid investment-linked policies that have high deductions. I advised them to attend the financial planning workshop and the life insurance talk organised by FISCA. Many consumers did not heed my advice, and went to invest in the wrong products, causing them to lose many tens of thousand dollars. It is a very painful experience.
To attend the talk, you should register now at http://easyapps.sg/assn/Org/Event.aspx?id=5
8 comments:
MAS must step in to stop all this.Are you there, MAS? Are you listening to the cries of investors whose future is destroyed by the incompetence and the greed of the insurance salesmen?
Investors are clueless about the financial products they bought. They didn't buy based on informed decision but trusting the salesmen who might be their friends or friends' friend.How can you let incompetent salesmen 'advise' on the future of consumers?
You must understand as the environment is buyer beware type, in another word u buy based on your eyes open big big therefore u die your business, nothing much they can do unless the regulatory environment is changed. If not it is not fare to ask the mid level staff to do something as they are not empower to do。
How could CPF allow her active members to withdraw their CPF saving to invest in these products?
MAS should stop these products to be sold to general public. If the general public want to buy these products, they must sit for the financial proficiency test.
Singapore has way too many "financial con-sultants" running around. Just look at the number of names being black listed by MAS, you can guess the extent of the problem. Those black listed move their offices to neighbouring countries and continue on their con-sultancies.
Still think dun mix Insurance with investment, can't have the cake and eat it as well, can't have the best of 2 worlds in one instrument. This is one rule to keep in mind, dun let your FI advisor pull wool over your eyes.
Why MAS/Govt allow such deceitful practices here, answer very simple, just to create employment for its cohort of O and A levels to make a living. It takes them donkey decades to rein in the estate agents' industry, now many of them are foreigners or previous citizens making a killing while the sun shines, and then bringing the bacon earned back to their home countries.
Dun ever put hopes and trust in MAS or Fidrec, it's their bonuses that is their priority, you die your own business. Many of their officials are just so-called FTs, could not care less except thier pockets.
Just be street smart, and remember your closest friend or relative is the one most likely to play you out, you tend to bring down your guard. Simply you only trust yourself, and with the 2 casinos around, lock up your house properly.
The latest fad is early payout critical illness product.Despite criticism that early detection there is only 0.05% chance the insurance salesmen are still pushing it to their existing trusting policyholders. In other words claim is almost impossible yet there is an insurer still preying on the fear and gullibility of consumers by using scary pictures of cancers as advertisement.
This industry is getting out of hand and MAS must regulate these products. The insurance companies have lost their conscience too.
One common occurance is the agent uses high pressure sales tacticks to entice the person to buy an investment linked policy. People should be educated on how to deal with insurance agents. For example if the agent gives a very rosy picture about the product being sold, all the agents verbal representations must be put in writing and signed by the CEO of the insurance company.
Mr. Tan, do you know that all your regular ILPs, like ID2, ID7 were replaced by a very expensive product not much different from the other companies' ILPs? Is this industry's best practice, I wonder.
Your ID7 was the best with 100% allocation . Your ID2 with 85% allocation for first 3 years after which 100%. Now the new regular ILP called volvo or some exotic name is with charges of 110% + and first year only 45% allocation. Breakeven? nobody knows. Of course the salesmen get higher commission for a few years.That is for 'managing' the clients' investment. Salesmen managing assets? Who are they kidding? I heard also you cannot 'save' more than $500 in this product. I wonder why? They don't want to save more, right? It is rather strange product. There must be some catch here. Is it they don't want you to lose more? or maybe make more. Isn't this product innovative?
They have spent your money in VIva Spain , lioa with your money in vivolink.
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