I received a desperate plea for help from an widow who lost a lot of money on failed investments made on the advice of the relationship manager of a bank. The victim was advised to invest in dual currency and other linked products on the assurance that they were "safe". The bad advice was given in spite of her constant reminder to the relationship manager that she did not want to take risk!
I gave this reply to her.
I have come across many cases that are similar to yours. It is indeed very sad that our Government allowed this type of environment to continue for so long and does not step in to check the abuse.I wish to write this word of advice to all readers of my blog. Do not invest in complex financial products, especially those that are being sold to you by financial advisers or relationship managers. Many of these advisers might be ignorant of the risks of these products themselves, so they may be honest in telling you that they are safe (and they are mistaken!). They work for the banks that you have trusted for many years, but regrettably, the bank does not wish to take the responsibility for the bad advice and failed investments.
The only way for a victim to get justice is to take the case to court. Here the odds are overwhelming. It is costly to fight against the big legal firms engaged by the bank. Furthermore, the court tend to apply the law rigidly and hold the victim responsible for signing away their rights in the forms that were given to them by the bank.
Another avenue is to write to the newspaper, but many victims prefer to be anonymous.
Due to these reasons, these cases are not publicized and more people fall into the trap over the years .
Are you willing to consider what needs to be done, i.e. to take the case to court or to write to the newspaper?
Please help to pass this message to your friends, so that they can avoid making the same mistake.
This is a real life story, and we dun have the slightest intention to boast.
ReplyDeleteAbout 2 months before the Euro broke the S$2.10 level, our relationship manager at DBS called up to introduce himself. One day we made a trip to the bank to do some banking, met him there and invited us to his room. Then he started his sale talk on "dual currency investment A/c.
A glib salesman and tempted by the exciting returns, decided on the S$ Euro A/C. Then reading thru a stack of documents, found that DBS had the right to close the A/c immediately should the Euro depreciated 2 basis point below the invested Ex rate.
Still Greed got the better of us, we were sold by the Rm saying," Dun worry, a country's currency won't go bankrupt."
Then the Internet saved us from suffering a huge loss. We gathered news that Spain was on a wild property development chase, some projects got stuck halfway, and become ghost towns, then we read the Greeks make a living working as civil servants for the Govt, pay very little tax, and mostly earning foreign Ex from tourism and maybe some shipping services, and the country's expenditure based on loans arranged by Goldman Sachs.
We got jittery, decided to close our dual currency a/c. Our RM advised us to keep the A/C, telling us not to trust internet news too much, at that time the Euro was still rising to 2.14 level, higher than our invested rate. We insisted on closing, and 2 months later the Euro reversed trend, pulled down by Greek's financial woes.
Motto of the story, macro news from around the world should decide your investment decisions, and trust your own analysis, and ignore the "noises" in the background.
One very good example is when President Obama decided to raise margin requirement for copper futures trading, then immediately all hard commodities investors should divest their investments, as Obama is targetting China, and you would never know which comes next.
Keep LKY's advice to heart, "Open your peppers wide wide, keep yourselves informed with world news around you if you wan to invest." Unfortunately LKY only know how to advise ordinary daft citizens, he dun know how to advise his own daughter in law.
About the issue of 'daughter-in-law's performance. One must understand that upholding the principle of meritocracy is what make Singapore system shine and work. The PAP government has so far failed to address this issue seriously and timely for one reason or another. As a result, the level of trust and confidence by the people is on the steep decline. Sad to say that.
ReplyDeleteIf she doesn't want to take risk, then why buy any sort of investment product? And is it really that easy to cajole someone into accepting something they vehemently resist?
ReplyDeleteThe issue here isn't unfair marketing practices or if MAS regulations are comprehensive enough - its about shockingly poor follow up service.
IMO to really solve the problem we need to reboot our understanding of financial risk for the individual - the rules and management techniques touted as most money/insurance managers are incompatible with the average individual.